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Government Funding and Nonprofit Organizations

^* To whom correspondence should be addressed. E-mail: waluksetich{at}stcloudstate.edu.

	Abstract

In this article, the author tests whether there is a simultaneous relationship between the number of nonprofits and government funding of nonprofit activity and whether the fundraising efforts of nonprofits are the means by which nonprofits affect the grants available to them. Estimates of the model are consistent with the proposition that government grants and contracts (program revenues) received by nonprofits are strong determinants of the number of nonprofits in a state. They lend support to the argument that nonprofit fundraising activities have an independent effect on the availability of the grants and contracts; however, although the number of nonprofit organizations per state has a similar effect on grants to nonprofits, they do not have an effect on the contacts they receive.

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