Exploring the Revenue Mix of Nonprofit Organizations -- Does it Relate to Publicness

Nonprofit organizations offer a wide range of goods and services and seek funding from a variety of revenue sources. Our working theory n this paper is that the sources of funding are related to the services a nonprofit provides - specifically whether services are public, private, or mixed in the nature of their benefits. Using multiple subfields from three major fields in the National Taxonomy of Exempt Entities (NTEE), this study divides nonprofits according to service type, and estimates the impact of service character on particular revenue streams and overall level of revenue diversification. Generally, the proportion of revenues generated by program fees is lowest for the category deemed public, highest for those with mostly private benefits, and midway for "mixed" services which are private in character but entail substantial public benefits. Similarly, the more public a nonprofit's services, the greater the proportion of revenues it generates through donations. However, we also identify some puzzling results that suggest the need for continued investigation of the determinants of the sources and mixes of nonprofit income. Working Paper 07-3