Nonprofit Finance: A Synthetic Review Thad D. Calabrese reviews the current state of research on nonprofit finance. The book comprehensively addresses core finance topics with a focus on those issues that differentiate nonprofit finance from traditional finance. Topics include the financial goals of nonprofits, sources and uses of funds, reserves and working capital, and debt and borrowing. The text also addresses recent innovations in nonprofit finance such as crowdsourcing donations, social impact bonds, flexible low yield paper, and donor-advised funds, as well as innovations in corporate forms. Throughout the text, gaps in our current knowledge are highlighted and avenues for future research are suggested. As such,
Nonprofit Finance: A Synthetic Review is relevant for researchers and practitioners alike.
The field of finance is concerned with the management of money and how and where such funds are acquired and used. This article reviews the broad literature on finance related to nonprofit and voluntary organizations, identifies gaps in knowledge, and proposes potential avenues for future researchers. It examines in detail the sources of funds for nonprofit organizations, especially nonprofit agencies—including issues around revenue portfolios and interactions, the uses of these funds—with an emphasis on incentives faced by nonprofit organizations around financial disclosures, the benefits and problems of slack resources and profits, and issues of capital structure in nonprofit organizations.
The foundations of volunteering, charitable giving, voluntary associations, voluntary agencies, and other aspects of the Voluntary Nonprofit Sector (VNPS) collectively and of individual voluntary action lie in various aspects of human nature and societies. These foundations may be referred to variously as altruism, morality, ethics, virtue, kindness, generosity, cooperation, social solidarity, and prosociality (eusociality). These foundations of the VNPS, and specifically of social solidarity and prosociality, are the subjects of this literature review article/book. The central goal is providing a comprehensive and interdisciplinary theoretical framework for understanding, explaining, and predicting such phenomena, based on two versions of the author’s S-Theory:
(1) Individual-System-Level General S-Theory of Human Behavior, as presented briefly here and in greater detail elsewhere (Smith, 2015, 2020a, 2020b; Smith & van Puyvelde, 2016);
(2) Social-System-Level General S-Theory of Collective Prosociality-Social Solidarity, as partially sketched here for the first time in print.
Social-System-Level General S-Theory of collective Prosociality-Social Solidarity argues that collective social solidarity can be better explained with a broader than usual range of factors as major causal influences, beyond normative systems. Individual prosociality behavior can be best explained and understood using the author’s Individual-System-Level General S-Theory of Human Behavior.
Prosociality includes (a) instrumental (task-oriented) helping behavior, such as formal and informal volunteering or charitable giving for non-household/non-immediate family persons and also informal care of residential household/immediate family persons, plus (b) expressive prosociality or sociability that involves positive interpersonal relations with one or more other persons, both in the residential household/immediate family or outside of it, based on feelings of attachment, fellowship, friendship, affection, and/or love.
Prosociality and social solidarity are clearly human universals, as Brown (1991) concludes from anthropological studies on hundreds of mostly preliterate societies on all continents. Such individual human prosociality activities often have positive short- and long-term consequences for the people who do them.
This article argues the position that the symbolic sense of community is a product of action by associations and larger community-based organizations. It draws on a theory from urban sociology called “the community of limited liability.” In the past this theory, first articulated by Morris Janowitz, has mostly been used to argue that residents living in a local neighborhood feel a sense of identification with that area to the extent that the symbolism of that neighborhood has been developed. This article extends Janowitz’s theory to apply to local associations and their efforts to create activities, movements, and products that encourage residents to expand their sense of symbolic attachment to a place. We argue that this organizational method has long been used by local associations but it has not been recognized as an organizational theory. Because associations have used this approach over time, communities have a historical legacy of organizing and symbol creating efforts by many local associations. Over time they have competed, collaborated, and together developed a collective vision of place. They also have created a local interorganizational field and this field of interacting associations and organizations is dense with what we call associational social capital. Not all communities have this history of associational activity and associational social capital. Where it does exist, the field becomes an institutionalized feature of the community. This is what we mean by an institutional theory of community.
This book studies the deviant form of Nonprofit Groups (NPGs), mainly volunteer-based associations, but occasionally paid-staff-based nonprofit agencies. A
Deviant Nonprofit Group (DNG) is defined as “a Nonprofit group that deviates significantly from certain moral norms of the society” (Smith, Stebbins, & Dover, 2006, p. 68). The aim is to develop and present an empirically grounded theory with eighty-three hypotheses about many of the key analytical features or operational and structural characteristics of DNGs. Such DNGs were usually voluntary associations with memberships and usually run by volunteers, not nonprofit agencies without memberships and usually run by paid staff (Smith, 2017a). The total theory may be termed a Grounded General Theory of DNG Operation-Structure. The book is based on an extensive review and qualitative content analysis of about 260 published research documents representing twenty-five common-language (vernacular) purposive-goal types of DNGs (vs. analytical-theoretical types, which do not exist in detail). Moral norms are the broad, emotionally charged, customary directives concerning what is right and wrong, by which members of a community or society implement their institutionalized solutions to problems significantly affecting their valued way of life (Stebbins, 1996, pp. 2–3). All the grounded hypotheses reported here were supported by empirical evidence for at least one (often two) of the two or three specific DNGs studied for all DNG types in source documents. Indeed,
all reported hypotheses were supported by most of the twenty-five DNG types studied, giving significant qualitative validity to the author’s Grounded General Theory of DNG Operation-Structure. Such support suggests these hypotheses are valid at least sometimes for most DNG types and deserve further investigation. Collectively, the hypotheses of the present theory can be seen as a new theoretical paradigm for studying NPGs that helps bring analytical order to a previously chaotic realm of nonprofit sector deviant (rule-breaking) phenomena.