Predicting the Financial Vulnerability of Charitable Organizations


  • Janet S. Greenlee,

  • John M. Trussel


This article describes a model that can be used to predict which nonprofit organizations are vulnerable to financial problems. The model is based on financial indicators developed by Tuckman and Chang (1991), adapts methodologies that have been developed in the for-profit sector to predict financial vulnerability, and was empirically tested using a multiyear Internal Revenue Service database provided by the National Center for Charitable Statistics. Both internal and external stakeholders can use the model when making allocation decisions during the strategic planning process and in evaluating financial risk.