An Affirmative Critique
Edited by Pascal Dey and Chris Steyaert
Chapter 3: Nonprofit commercial revenue: a replacement for declining government grants and private contributions?
This chapter examines whether there has been an increase in non-profit commercial revenue and if so whether declines in government grants and private contributions were behind the rise. A number of non-profit scholars have held that non-profit commercial activity increased significantly during the 1980s and 1990s. Following on resource dependency theory, they suggest that non-profits use commercial income as a replacement for lost government grants and private revenue. However, authors for and against this thesis have provided little empirical evidence to test these claims. This study uses the Internal Revenue Services’ Statistics of Income database to track sources of revenue for charitable non-profit organizations from 1982 to 2002. Trend and panel analysis show that although there was a large increase in commercial revenue, there is little evidence the increase was associated with declines in government grants and private contributions. Findings point to institutional theory and have important implications for policymakers and non-profit practitioners.
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