The Effect of Government Funding on Nonprofit Administrative Efficiency: An Empirical Test

Abstract:

Peter Frumkin and Mark T. Kim, October 2002

This article draws on a large longitudinal data set of nonprofit organizations in order to shed light on the consequences of government funding on nonprofit administrative efficiency and gain a more grounded understanding of the link between public funding and nonprofit efficiency. The piece first surveys literature on the nature of public funding and its impact on the administrative efficiency of nonprofits. It then presents the data and analyzes the impact of public funding on a group of nonprofit organizations over an 11-year period. The piece concludes with an exploration of the implications of the findings for future research on public-nonprofit relations.

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