Is greater reliance on earned income an important factor for nonprofit growth?
This study investigates how greater reliance on earned income as a proportion of total revenue effects nonprofit growth. While earned income strategies have a long history in some parts of the nonprofit sector, they have been embraced by more fields and in more forms in recent times. Yet little is understood about whether or not these strategies have succeeded in delivering greater growth than reliance on traditional sources of funding. Using data from Internal Revenue Services 990 Form submissions by nonprofits and Ordinary Least Squares (OLS) regression, this study finds a highly statistically significant association between greater reliance on earned incomes and higher rates of growth. These findings add to the evidence that social enterprises - nonprofits with a high reliance on earned income - are now sufficiently distinct from traditional nonprofits for policymakers to consider creating a separate legal status to meet their hybrid needs. Moreover, it invites questions about the role government should play in supporting the development of this new and distinct form of organization.
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Iribarren, Maria Luisa (Georgetown University, 2015)The Earned Income Tax Credit (EITC) expansion in 2009 substantially expanded the benefit given to a family with three or more children compared to a family with two children, with one child, and with no children. Using ...
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