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The Marketisation of Charities in England and Wales

Abstract

Much has been written about the reasons for and impact of marketisation on charities, their clients, and wider civil society. A central component of the marketisation thesis is that charities are substituting grants and donations with commercial revenue. However, there is no consensus in the existing literature as to whether the two sources of revenue are substitutes or complementary. This paper shows that between 2003 and 2007 there was a significant increase in the proportion of overall revenue attracted from commercial sources by charities in England and Wales. Using our preferred generalised method of moments estimation model we show that the annual persistence of commercial revenue overtime was 44 %. In particular, a +10 % change in grants and donations was associated with a −3.1 % change in commercial revenue.

Résumé

Beaucoup a été écrit sur les motifs et l’impact de la marchandisation sur les organisations caritatives, leurs clients et la société civile plus large. Une composante centrale de la thèse portant sur la marchandisation est que les organisations caritatives substituent les subventions et dons par un revenu commercial. Il n’existe pas toutefois de consensus dans les publications actuelles quant au fait de savoir si les deux sources de revenus se substituent l’une à l’autre ou se révèlent complémentaires. Cet article indique qu’entre 2003 et 2007, une augmentation significative s’est produite en Angleterre et au Pays de Galles quant à la part du revenu global des organisations caritatives, issue de sources commerciales. Par l’utilisation de notre modèle privilégié d’estimation dit Méthode généralisée des moments (GMM - Generalised Method of moments), nous montrons que la persistance annuelle du revenu commercial au cours du temps était de 44 %. En particulier, une variation de +10 % quant aux subventions et dons s’est associée à une variation de -3,1 % en termes de revenu commercial. Ce dernier est donc un substitut inextensible quant aux subventions et dons.

Zusammenfassung

In der Literatur findet zahlreiche viele Ausführungen zu den Gründen für eine Vermarktlichung von gemeinnützigen Organisationen und deren Auswirkungen auf diese Organisationen, ihre Leistungsempfänger und im Weiteren die Bürgergesellschaft. Ein wichtiger Bestandteil der Vermarktlichungsthese ist, dass die gemeinnützigen Organisationen Subventionen und Spenden durch kommerzielle Einnahmen ersetzen. Allerdings herrscht in der Literatur keine Einigkeit darüber, ob sich die beiden Einnahmequellen gegenseitig ersetzen oder ergänzen. Dieser Beitrag demonstriert, dass der Anteil der Gesamteinnahmen aus kommerziellen Quellen in den gemeinnützigen Organisationen in England und Wales zwischen 2003 und 2007 deutlich angestiegen ist. Unter Verwendung unseres bevorzugten Bewertungsmodells beruhend auf der verallgemeinerten Momentmethode zeigen wir, dass die jährliche Persistenz der kommerziellen Einnahmen im Laufe der Zeit 44 % betrug. Im Einzelnen stand ein 10 %-iger Anstieg von Zuwendungen und Spenden in Verbindung mit einem 3,1 %-igen Rückgang der kommerziellen Einnahmen. Folglich handelt es sich bei den kommerziellen Einnahmen um einen inflexiblen Ersatz für Subventionen und Spenden.

Resumen

Se ha escrito mucho sobre los motivos y el impacto de la comercialización en las organizaciones benéficas, sus clientes, y la sociedad civil en general. Un componente central de la tesis de la comercialización es que las organizaciones benéficas están sustituyendo las subvenciones y donaciones con ingresos comerciales. Sin embargo, no existe consenso en el material publicado existente sobre si las dos fuentes de ingresos se sustituyen o se complementan. El presente documento muestra que entre 2003 y 2007, hubo un aumento significativo de la proporción de ingresos globales obtenidos a partir de fuentes comerciales por parte de las organizaciones benéficas en Inglaterra y Gales. Utilizando nuestro modelo de estimación preferido Método Generalizado de Momentos (GMM, del inglés Generalised Methos of Moments), mostramos que la persistencia anual de ingresos comerciales a lo largo del tiempo fue del 44 %. En particular, un cambio de más del 10 % en subvenciones y donaciones se asoció a un cambio de - 3,1 % en ingresos comerciales. Por lo tanto, los ingresos comerciales son un sustituto inelástico de las subvenciones y las donaciones.

摘要

已经有许多有关市场化的原因以及它对慈善、其客户和更加广泛民间团体的影响。市场化理论的核心部分是慈善组织正以商业收入替换拨款和捐助。然而,现有文献对两个收入来源是否是替代或补充还没有一致意见。本文显示,在2003到2007年之间,英格兰和威尔士的慈善组织从商业来源获得资金占全部收入的比例极大增加。使用首选广义矩量法 (GMM) 估计模型,我们发现商业收入随时间变化的年存留是44 %。尤其是, + 10 %的拨款和捐助变化与-3.1 %的商业收入变化关联。由此,商业收入是拨款和捐助的非弹性替代品。.

ملخص

لقد تم كتابة الكثير عن أسباب وتأثير التحول إلى إقتصاد السوق في المؤسسات الخيرية وعملائها، والمجتمع المدني على نطاق أوسع. عنصرا˝ رئيسيا˝ من رسالة علمية للتحول إلى إقتصاد السوق هو أن الجمعيات الخيرية تستبدل المنح والهبات بإيرادات تجارية. مع ذلك لا يوجد إجماع في الأدبيات الموجودة حول ما إذا كان مصدرين من الإيرادات بدائل أو تكميلي. يوضح هذا البحث أن الفترة بين عامي 2003 و 2007 كانت هناك زيادة كبيرة في نسبة الإيرادات العامة تم جذبها من مصادر تجارية من قبل الجمعيات الخيرية في إنجلترا وويلز. بإستخدام طريقة مفضلة لدينا وهي تعميم اللحظات (GMM)نموذج تقدير يبين لنا أن الإستمرار السنوي للإيرادات التجارية مع مرور الوقت كان 44٪. على وجه الخصوص، كان مرتبطابتغيير + 10٪ في المنح والهبات مع تغيير -3.1٪ في الإيرادات التجارية. بالتالي الإيرادات التجارية هي بديل غير مرن للهبات والتبرعات.

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Fig. 1
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Notes

  1. We dropped the year 2008 from the final model as there were changes in the way Guidestar UK classified commercial revenue leading to a discontinuity with previous data.

  2. Investment income is not explored further in this paper, as it makes up a relatively small proportion of charities aggregate income.

  3. Which is freely available at http://data.ncvo-vol.org.uk/?p=75.

  4. This has since changed to £250,000.

  5. The decline in mean revenues (across all categories) in 2006 is a consequence of a larger number of organisations being included in our sample in this year. While this affects the mean values it has no noticeable effect on the trend showing a gradual increase in the proportion of commercial revenue.

  6. Data processing was carried out using Stata 11, and GMM estimations were conducted using the routine xtabond2; see Roodman (2006) for details.

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McKay, S., Moro, D., Teasdale, S. et al. The Marketisation of Charities in England and Wales. Voluntas 26, 336–354 (2015). https://doi.org/10.1007/s11266-013-9417-y

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Keywords

  • Charities
  • Crowding out
  • Marketisation
  • Models with panel data
  • Nonprofit
  • Revenue mix
  • Substitution effect