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Factors Contributing to the Size of Nonprofit Sector: Tests of Government Failure, Interdependence, and Social Capital Theory

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Abstract

Based on the county-level longitudinal data in the USA, this study finds that racial diversity is positively associated with the nonprofit sector size. We further find that the share of children below poverty level is negatively associated with the size of nonprofit sectors. Our findings support the government failure theory. Random effects models also show that federal funding and local funding are positively associated with the size of nonprofit sectors, which confirms interdependence theory. Lastly, we do not find statistically significant relationship between social capital—measured by the number of associations—and the nonprofit sector size.

Résumé

Fondée sur des données longitudinales nationales américaines, la présente étude démontre que la diversité raciale est positivement associée à la taille des secteurs sans but lucratif. Nous découvrons de plus que la part d’enfants vivant sous le niveau de la pauvreté est négativement associée à la taille des secteurs sans but lucratif. Nos découvertes appuient la théorie de l’échec gouvernemental. Les modèles à effets aléatoires prouvent aussi que les financements fédéraux et locaux sont positivement associés à la taille des secteurs sans but lucratif, ce qui confirme la théorie de l’interdépendance. Nous ne décelons enfin pas de relation statistiquement importante entre le capital social, mesuré par le nombre d’associations, et la taille des secteurs sans but lucratif.

Zusammenfassung

Beruhend auf den Längsschnittdaten, die auf der County-Ebene in den USA erfasst wurden, kommt diese Studie zu dem Ergebnis, dass die rassische Vielfalt in positiver Verbindung mit der Größe des gemeinnützigen Sektors steht. Des Weiteren ist zu sehen, dass der Anteil von Kindern unterhalb der Armutsgrenze in negativer Verbindung zur Größe der gemeinnützigen Sektoren steht. Die Ergebnisse bestätigen die Theorie des Staatsversagens. Zudem zeigen Modelle der Zufallseffekte, dass die Finanzierung durch die Bundesregierung sowie die lokale Finanzierung in einer positiven Verbindung mit der Größe der gemeinnützigen Sektoren stehen, was die Interdependenztheorie bestätigt. Letztlich ist keine statistisch signifikante Beziehung zwischen dem sozialen Kapital - gemessen an der Zahl der Vereinigungen - und der Größe des gemeinnützigen Sektors zu erkennen.

Resumen

Basándose en los datos longitudinales a nivel de país en los Estados Unidos, el presente estudio muestra que la diversidad racial se asocia de manera positiva con el tamaño del sector de las organizaciones sin ánimo de lucro. Encontramos también que la proporción de niños por debajo del nivel de pobreza se asocia de manera negativa con el tamaño del sector de las organizaciones sin ánimo de lucro. Nuestros hallazgos apoyan la teoría del fracaso del gobierno. Los modelos de efectos aleatorios muestran también que la financiación federal y la financiación local se asocian de manera positiva con el tamaño del sector de las organizaciones sin ánimo de lucro, lo que confirma la teoría de la interdependencia. Por último, no encontramos una relación estadísticamente significativa entre el capital social - medido por el número de asociaciones - y el tamaño del sector de las organizaciones sin ánimo de lucro.

Chinese

基于美国的县级纵向数据,本研究发现种族差异性与非盈利领域的规模呈正相关。我们进一步发现,贫困线以下的儿童数量与非盈利领域的规模呈负相关。我们的调查结果支持了政府失灵理论。随机影响模型还表明,联邦资金和当地资金与非盈利领域的规模呈正相关,这确认了相互依赖理论。最后,我们未发现社会资本-以协会的数量来测量—和非盈利领域规模之间存在重要的统计关系。

Arabic

استنادا إلى البيانات الطولية على مستوى المقاطعة في الولايات المتحدة، وجدت هذه الدراسة أن التنوع العرقي يرتبط إرتباطا” إيجابيا” بحجم القطاع الغير ربحي. نجد أيضا” أن نسبة الأطفال دون مستوى الفقر ترتبط سلبا” بحجم القطاعات الغير ربحية. نتائجنا تدعم نظرية فشل الحكومة. تظهر نماذج الآثار العشوائية أيضا” أن التمويل الفيدرالي والتمويل المحلي يرتبطان إيجابيا” بحجم القطاعات الغير ربحية، مما يؤكد نظرية الترابط. أخيرا”، فإننا لا نجد علاقة ذات دلالة إحصائية بين رأس المال الاجتماعي - يقاس بعدد الجمعيات - وحجم القطاع الغير ربحي.

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  • 02 July 2018

    The PDF version of this article was reformatted to a larger trim size.

Notes

  1. The Nonprofit Employment reports published by Grønbjerg et al. (2009) focus on private nonprofits registered as tax-exempt entities according to the U.S. Internal Revenue Service under section 501 (c) of the Internal Revenue Code. The organizations include private, not-for-profit hospitals, clinics, colleges, universities, elementary schools, social service agencies, day care centers, orchestras, museums, theaters, homeless shelters, soup kitchens, and many other types of organizations, i.e., civic organizations, trade associations, and unions. Although the presence of a few large establishments such as hospitals or universities may bias the measurement of an accurate distribution of nonprofit employment by county, this study includes these two types of nonprofit organizations because the Nonprofit Employment reports only provide the number of total nonprofit employment in each county.

  2. Kim (2015) uses income inequality to measure economic diversity. The U.S. Census Bureau, however, has released income inequality data at the county-level since 2006. Hence, this study uses the proportion of children below poverty level instead of inequality to measure poverty level.

  3. According to the Pettijohn (2013, p. 1), federal government uses contract and grant as the main two funding tools to fund nonprofit organizations. She states that grants are “authorized expenditure(s) to a non-federal entity for a defined public or private purpose in which services are not rendered to the federal government,” and contracts are “mutually blinding legal relationship obligating the seller (contractor) to furnish the supplies or services (including construction) and the buyer (federal government) to pay for them.

  4. Rupasingha et al (2006) included associations such as (a) civic organizations; (b) bowling centers; (c) golf clubs; (d) fitness centers; (e) sports organizations; (f) religious organizations; (g) political organizations; (h) labor organizations; (i) business organizations; and (j) professional organizations. This study, however, focuses on (b) bowling centers; (c) golf clubs; (d) fitness centers; (e) sports organizations because other organizations are categorized as nonprofit organizations, and thus may cause endogeneity bias.

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Bae, K.B., Sohn, H. Factors Contributing to the Size of Nonprofit Sector: Tests of Government Failure, Interdependence, and Social Capital Theory. Voluntas 29, 470–480 (2018). https://doi.org/10.1007/s11266-017-9888-3

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