Session Recap: Nonprofit Financial Management: Insights from the Public and Private Sectors
November 7, 2014 08:30 AM
By Bijetri Bose, University of Washington
Chair: David Berlan, Florida State University
Discussant: Todd L. Ely, University of Colorado Denver
Sustained Support? Analyzing the Response Function of Charitable Giving Following a Natural or Man-Made Random Shock- Jaclyn D. Petruzzelli, Shena R. Ashley and Stuart Bretschneider, Syracuse University
The Role of Revenue Type in the Growth of Young Not-for-Profits: A Dynamic Analysis- Elizabeth A.M. Searing, Georgia State University
Pension Funding and Management in the Third Sector- Thad D. Calabrese, New York University
The Thursday panel on Nonprofit Financial Management: Insights from the Public and Private Sectors raised a set of interesting questions. The first paper presented by Jaclyn D. Petruzzelli from the Syracuse University examined the effects of a natural or man-made random shock on the total revenue received by nonprofit organizations. The authors found an increase in total revenue of nonprofits in all sectors following the shock, instead of an increase in the revenues of some sectors along with a decrease in others. With an expected increase in the occurrence of random shocks in the future, the implications of this paper becomes important. However, the increments do not last beyond a year.
The next presentation was by Elizabeth A.M. Searing, Georgia State University, who looked at the expense side of financial management of nonprofits. She studied the relationship between accumulation of unrestricted net assets and nonprofit growth, as measured by total expenses, specifically for younger organizations. The results of this study informs decision-making for nonprofit managers and expanded the literature regarding the determinants of nonprofit growth.
The last presenter, Thad D. Calabrese from the New York University, introduced a topic that has not been discussed in the nonprofit context previously – the public charities’ pension plan system. He tested whether public charities funded and managed their pension systems as predicted by the traditional view, the corporate finance view, or contribution-based views. The analysis of these pension systems helps understand the financial incentives that nonprofit managers face in meeting prudent financial management as well as mission objectives.
As Todd L. Ely of the University of Colorado Denver pointed out at the end of the discussion, these papers bring into the spotlight several important aspects of nonprofit financial management. Yet they had to deal with the same data issues since they all use the Form 990 data, which led to a discussion regarding the quality of data available and the way forward with it.