Park & Peng on Nonprofits’ Revenue Streams and Provision of Collective Goods

Young Joo Park and Shuyang Peng (both at the University of New Mexico School of Public Administration) have published Advancing Public Health Through Tax-Exempt Hospitals: Nonprofits’ Revenue Streams and Provision of Public Goods in the Nonprofit and Voluntary Sector Quarterly. Here is the abstract:

Nonprofit organizations play an essential role in the provision of collective goods. Focusing on a unique subsector in the United States, this study examines the extent to which nonprofit hospitals’ provision of community benefits is related to their revenue streams. Building on existing theories, we postulate that as the proportion of a certain revenue source (i.e., government grants, private contributions, and program fees) increases, its corresponding benefits also increase. Using data from the Internal Revenue Service (IRS) 990 filed by tax-exempt hospitals nationwide, we performed panel data analysis with year and id fixed effects using robust standard errors. The findings show that the proportion of private donations is positively associated with community benefits, whereas that of program income is negatively related to community benefits. Overall, nonprofits’ decision to serve disadvantaged groups and larger communities is associated with their income sources. The study raises implications that are pertinent to nonprofit management, public administration, and health administration.

Lloyd Mayer