Thursday, November 6, 2014: 10:15 AM-11:45 AM
Dona Ana (Convention Center)
*Names in bold indicate Presenter
Panel Organizers: Elizabeth A.M. Searing, Georgia State University
Panel Chairs: David Berlan, Florida State University
Discussants: Todd L. Ely, University of Colorado, Denver
Financial management in the nonprofit sector is a unique challenge, as evidenced by utilization of both fund accounting and GAAP, reliance on a portfolio of different types of income, and other similar strategies. However, this third sector uniqueness could also be construed as a hybridization of financial management practices in the first two sectors. Thirty years ago, Young (1983) was encouraging nonprofits to look to private sector entrepreneurs as potential models and inspirations; in 1995, Smith and Lipsky turned our attention to the ever-increasing reliance of government on third sector organizations to deliver high quality public goods and services. Attempts to transplant lessons from the public and private sectors have not been without serious criticism, most notably surrounding the “commercialization” of the nonprofit sector (Weisbrod, 1997). Yet as the challenges of modern policymaking and management grow, we should not overlook the nonprofit sector’s roots as we search for new perspectives. What financial traits, both positive and negative, do nonprofits share with government and private enterprise – and what lessons do these insights hold?
This panel’s papers each pose novel answers to such questions. First, microeconomic theory is used to model trends in charitable giving to nonprofit subsectors during the years following a sudden disaster or shock. Second, the private sector adage that profits and enterprise growth are mutually exclusive is tested in the third sector by studying unrestricted net assets (UNA) and other potential determinants using different panel data methods. Finally, illustrating a potential drawback in such cross-sector similarities, evidence is brought that the nonprofit sector, like the public sector, is harboring startling amounts of unfunded pension obligations, overstating nonprofit health as it is currently perceived.
In 1997, Weisbrod predicted that resource scarcity would continue to bring the three sectors into closer proximity; now that we are finally emerging from the shadow of the Great Recession, the knowledge of which concepts do and do not translate across sector lines is both timely and useful. Aside from its practical use as a guide for practitioners, these papers have the potential to inform scholars of the fluid and permeable boundaries between the three sectors.
Smith, S. R., & Lipsky, M. (1995). Nonprofits for hire: The welfare state in the age of contracting: Harvard Univ Pr.
Weisbrod, B. A. (1997). The future of the nonprofit sector: Its entwining with private enterprise and government. Journal of Policy Analysis and Management, 16(4), 541-555.
Young, D. R. (1983). If not for profit, for what? . Lexington, MA: Heath.