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- Title
Is Bigger Really Better?
- Authors
Woronkowicz, Joanna
- Abstract
This study investigates the effect of a capital facilities project on nonprofit financial vulnerability metrics. The author employs a difference-in-differences technique to model the relationship between facilities investments and financial vulnerability indicators using data for a matched-pair sample of nonprofit organizations that invested and did not invest in a facilities project. Overall the findings suggest that investments in facilities are associated with temporary increases in an organization's net assets ratio and decreases in its surplus ratio after a project is completed, and that the costs associated with facilities projects (for example, debt) place strain on nonprofit finances. The study's findings have implications for the financial management of nonprofit organizations, particularly in regard to the associated costs of capital expansion.
- Subjects
NONPROFIT organization finance; NONPROFIT organization management; NONPROFIT failures; FINANCIAL management; DATA management
- Publication
Nonprofit Management & Leadership, 2016, Vol 27, Issue 1, p79
- ISSN
1048-6682
- Publication type
Article
- DOI
10.1002/nml.21209