The impact of the diversification of revenues on NGOs’ commercialization: evidence from Poland

Paweł Mikołajczak

Abstract

Research background: The commercialization of non-governmental organizations through undertaking an activity based on the commercial sale of services and products is a phenomenon which raises controversy among numerous researchers. Traditionally, NGOs act in a sector of social services to solve problems, such as homelessness, exclusion or social pathologies. They also provide different services which cannot be provided by the market, for instance in education, the healthcare system, culture, or art. Driven by a social mission, NGOs introduce their concepts, strongly relying on fees to perform their activity. They also obtain funds in the form of public donations or payments from private or institutional donors. Growing social needs and changes in the governmental policy aimed at reducing social-aid spending have put pressure on NGOs to develop entrepreneurial strategies to gain financial support. Purpose of the article: The aim of the paper is to investigate how particular funding sources affect the probability of non-governmental organizations’ commercialization. Methods: Data for the analyses have been collected from a national survey of Polish non-governmental organizations. In the analysis of logistic regression, a specially-developed model was used to estimate the probability of NGOs’ commercialization, depending on the selected categories of funding sources. Findings & Value added: An analysis of the results indicates clearly that the likelihood of NGOs’ commercialization slightly decreases as a greater number of private external financial sources is used. In contrast with existing literature, which claims that government funding is crowding out commercial activity, this research finds that, to some extent, public funds positively stimulate the commercialization of NGOs. The contribution of this research is that it introduces the category of internal financing sources of non-profit organizations, which have been overlooked in previous studies. The article provides clear statistical arguments demonstrating that private internal revenues strongly affect the commercialization of the organizations surveyed. The paper is the first to present a model that comprehensively considers the probability of NGOs’ commercialization, including private external and internal, as well as public, sources of funding.
Autor Paweł Mikołajczak (WE / KB)
Paweł Mikołajczak
- Katedra Pieniądza i Bankowości
Tytuł czasopisma/seriiEquilibrium, ISSN 1689-765X, e-ISSN 2353-3293, (B 14 pkt)
Rok wydania2018
Tom13
Nr4
Paginacja761-779
Objętość publikacji w arkuszach wydawniczych0.9
Słowa kluczowe w języku angielskimcommercialization, NGOs, financial sources, revenue diversification
DOIDOI:10.24136/eq.2018.037
URL http://economic-research.pl/Journals/index.php/eq/article/view/1130/1122
Języken angielski
Punktacja (całkowita)14
Żródło punktacjijournalList
PunktacjaPunktacja MNiSW = 14.0, 11-03-2020, ArticleFromJournal
Wskaźniki publikacji Cytowania WoS = 0
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