Do Donors Penalize Nonprofit Organizations with Accumulated Wealth?
Article first published online: 14 NOV 2011
Copyright © 2011 The American Society for Public Administration
Public Administration Review
Volume 71, Issue 6, pages 859–869, November/December 2011
How to Cite
Calabrese, T. D. (2011), Do Donors Penalize Nonprofit Organizations with Accumulated Wealth?. Public Administration Review, 71: 859–869. doi: 10.1111/j.1540-6210.2011.02420.x
- Issue published online: 14 NOV 2011
- Article first published online: 14 NOV 2011
Does current accumulated wealth by nonprofit organizations influence contributions from individuals? Existing research demonstrates that financial reserves aid program continuity during economic downturns. Yet donors, charity watchdogs, and policy makers voice concern about accumulated wealth in nonprofits. This empirical analysis examines whether the expected negative relationship occurs when donors perceive accumulated wealth as excessive. The results support the conclusion that future contributions are negatively affected when wealth levels are deemed excessive. Nonprofit managers concerned that accumulated wealth will diminish donations should consider financial strategies that will allow their organizations to build modest—but not excessive—reserves.