Nonprofit organisations finance themselves in diverse ways. Recent scholarship suggests that nonprofit income composition is related to the kinds of service benefits an organisation provides. Testing this idea has been difficult, in part because available data sources do not provide
precise descriptions of the nature of service benefits and beneficiaries. The present paper overcomes this limitation by directly examining the missions, services, beneficiaries and finances of a sample of nonprofits through website analysis correlated with financial data from tax forms. The
results offer strong support for a benefits-based theory of nonprofit finance. In particular, the public/private nature of services offered by a nonprofit organisation is a significant determinant of the kind and mix of revenue it attracts. This is an important finding, especially in today’s
challenging economic environment, because it suggests that an organisation’s income strategy should be directly related to its programmatic mission.
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