Sustainability strategies of socially oriented NPOs: grant support mechanism
Автор: Starshinova Alevtina V., Borodkina Olga I.
Журнал: Economic and Social Changes: Facts, Trends, Forecast @volnc-esc-en
Рубрика: Social and economic development
Статья в выпуске: 5 т.15, 2022 года.
Бесплатный доступ
The amount of grant support allocated by the state to the non-profit sector of social services is increasing annually; the number of social projects and the volume of their funding are growing as well. The state’s interest in the qualitative development of socially oriented non-profit organizations and expansion of the segment of their participation in social services is determined by the opportunities that non-profit organizations possess as new performers of social services, capable of introducing innovation in addressing social problems of citizens in need of support. In Russia, the Presidential Grants Foundation is the major grant operator that accumulates public funds and distributes them on a competitive basis among non-profit organizations. Its unique competitive system complies with modern standards for supporting project applications and supports socially oriented non-profit organizations in the process of implementing winner projects. The Foundation is also distinguished by a more significant amount of funds allocated to support grants in comparison with other grantmakers, including private foundations. The problem that determined the focus of the issues considered in the article is the contradiction between the significant amount of support provided to regional socially oriented non-profit organizations in the process of their formation as providers of social services, and the continuing low efficiency of these organizations. We investigate major strategies for raising funds by socially oriented non-profit organizations and show that their income portfolio consists mainly of the funding that comes from grant support, which is accompanied by risks of financial instability of organizations and an increasing dependence on grant funds as the main source of income. The empirical base of the study includes open source data and interviews with representatives of regional socially oriented non-profit organizations, resource centers and grantgivers (n = 27). Based on the analysis of interviews with the participants of the study, the article examines the possibilities of income diversification for non-profit organizations and the risks each strategic perspective may entail. We reveal the readiness of non-profit organizations to develop strategies aimed at attracting donor funding and income-generating activities. We also define conditions under which organizations are able to implement the discussed strategies in practice.
Grant support, socially oriented non-profit organizations, financial vulnerability risks, sustainability strategies, subsidies, presidential grants foundation
Короткий адрес: https://sciup.org/147239118
IDR: 147239118 | DOI: 10.15838/esc.2022.5.83.12
Список литературы Sustainability strategies of socially oriented NPOs: grant support mechanism
- Arkhipova E.B., Borodkina O.I. (2021). The problems and contradictions of digital transformation of social services’ organizations in Russia. Sotsiologiya nauki i tekhnologii=Sociology of Science and Technology, 12(4), 116–134. DOI: 10.24412/2079–0910-2021-4-116-134 (in Russian).
- Ashley S., Faulk L. (2010). Non-profit competition in the grants marketplace: Exploring the relationship between non-profit financial ratios and grant amount. Non-profit Management and Leadership, 21(1), 43–57. DOI: 10.1002/nml.20011
- Borodkina O.I., Starshinova A.V., Arkhipova E.B. (2022). Social investment: Problems and development strategies. Terra Economicus, 20(2), 6–31. DOI: 10.18522/2073–6606–2022-20-2-6-31 (in Russian).
- Bowman W. (2011). Financial capacity and sustainability of ordinary non-profits. Non-profit Management and Leadership, 22(1), 37–51. Available at: https://doi.org/10.1002/nml.20039
- Carroll D.A., Stater K.J. (2009). Revenue diversification in non-profit organizations: Does it lead to financial stability? Journal of Public Administration Research and Theory, 19(4), 947–966. Available at: http://dx.doi.org/10.1093/jopart/mun025
- Cortis N., Lee I. (2019). Assessing the financial reserves of social service charities involved in public service delivery. Non-profit and Voluntary Sector Quarterly, 48(4), 738–758. DOI: 10.1177/0899764018815619
- De Andres-Alonso P., Garcia-Rodriguez I., Romero-Merino M.E. (2016). Disentangling the financial vulnerability of non-profits. Voluntas, 27, 2539–2560. Available at: https://doi.org/10.1007/s11266-016-9764-6
- De Wit A., Bekkers R., van Groenou M.B. (2017). Heterogeneity in crowding-out: When are charitable donations responsive to government support? European Sociological Review, 33(1), 59–71. DOI: 10.1093/esr/jcw048
- Dell S., Subedi M., Hsu M.K., Farazmand A. (2022). Social capital and financial performance in non-profits. Public Organization Review, 22(1), 193–210. DOI: 10.1007/s11115-021-00570-0
- Faulk L., McGinnis Johnson J., Lecy J.D. (2017). Competitive advantage in non-profit grant markets: Implications of network embeddedness and status. International Public Management Journal, 20(2), 261–293. Available at: https://doi.org/10.1080/10967494.2016.1141811
- Frumkin P., Keating E.K. (2011). Diversification reconsidered: The risks and rewards of revenue concentration. Journal of Social Entrepreneurship, 2(2), 151–164. Available at: https://doi.org/10.1080/19420676.2011.614630
- Green E., Ritchie F., Bradley P., Parry G. (2021). Financial resilience, income dependence and organisational survival in UK charities. Voluntas, 32(5), 992–1008. Available at: https://doi.org/10.1007/s11266-020-00311-9
- Kingma B.R. (1993). Portfolio theory and non-profit financial stability. Non-profit and Voluntary Sector Quarterly, 22(2), 105–119.
- Lu J., Zhao J. (2019). Does government funding make non-profits administratively inefficient? Revisiting the Link. Non-profit and Voluntary Sector Quarterly, 48(6), 1143–1161. DOI:10.1177/0899764019859435
- Martynov M.Yu. (2019). Socially oriented non-profit organizations – acquiring legitimacy? Sotsiologicheskie issledovaniya, 10, 83–93. DOI: 10.31857/S013216250007102-5 (in Russian).
- Mazanec J., Bartosova V. (2021). Prediction model as sustainability tool for assessing financial status of non-profit organizations in the Slovak Republic. Sustainability (Switzerland), 13(17), 9721. Available at: https://doi.org/10.3390/su13179721
- Mikołajczak P. (2018). The impact of the diversification of revenues on NPOs’ commercialization: Evidence from Poland. Equilibrium. Quarterly Journal of Economics and Economic Policy, 13(4), 761–779. DOI: 10.24136/eq.2018.037
- Paarlberg L.E., Moulick A.G., Van Puyvelde S. (2017). Testing a two-stage grant allocation process: The case of the united way. Non-profit and Voluntary Sector Quarterly, 46(6), 1117–1141. DOI: 10.1177/0899764017720769
- Qu H. (2019). Risk and diversification of non-profit revenue portfolios: Applying modern portfolio theory to non-profit revenue management. Non-profit Management and Leadership, 30(2), 193–212. DOI: 10.1002/nml.21385
- Searing E.A.M., Wiley K.K., Young S.L. (2021). Resiliency tactics during financial crisis: The non-profit resiliency framework. Non-profit Management and Leadership, 32(2), 179–196. DOI: 10.1002/nml.21478
- Starshinova A.V., Borodkina O.I. (2020). NGOs’ activities in social services: Public expectations and regional practices. Zhurnal issledovanii sotsial'noi politiki=Journal of Social Policy Studies, 3, 411–428. DOI: 10.17323/727-0634-2020-18-3-411-428 (in Russian).
- Starshinova A.V., Chikova E.V. (2021). Acceleration programs in the ecosystem of social entrepreneurship support. Ekonomicheskie i sotsial'nye peremeny: fakty, tendentsii, prognoz=Economic and Social Changes: Facts, Trends, Forecast, 14(4), 216–230. DOI: 10.15838/esc.2021.4.76.13 (in Russian).
- Stepanov V.A. (2020). Effectiveness of grant support for Russian socially-oriented non-profit organizations (the case of the Presidential Grants Fundation). Sotsiologicheskie issledovaniya, 9, 79–89. DOI: 10.31857/S013216250009619-3 (in Russian).
- Stewart A.J., Faulk L. (2014). Administrative growth and grant payouts in non-profit foundations: Fulfilling the public good amid professionalization? Public Administration Review, 74(5), 630–639. Available at: https://doi.org/10.1111/puar.12231
- Tevel E., Katz H., Brock D.M. (2015). Non-profit financial vulnerability: Testing competing models, recommended improvements, and implications. Voluntas, 26(6), 2500–2516. DOI: 10.1007/s1 1266-014-9523-5
- Zhao J., Lu J. (2019). The crowding-out effect within government funding: Implications for within-source diversification. Non-profit Management and Leadership, 29(4), 611–622. Available at: https://doi.org/10.1002/nml.21351