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A Methodology for Measuring the Financial Vulnerability of Charitable Nonprofit Organizations

Cyril F. Chang

This article defines a charitable nonprofit organization as financially vulnerable if it is likely to cut service offerings immediately when a financial shock occurs. It discusses why the vulnerability of the nonprofit sector is of interest to researchers, explores the destabilizing role of third-party finance, considers the reasons for the lack of research on vulnerability, and presents a conceptual framework for identifying finan cially vulnerable nonprofits. Four vulnerability criteria are defined and applied to a 1983 national sample of tax returns filed by 4,730 U.S. charitable nonprofits. The financial data of at-risk organizations are then analyzed to discern the characteristics of vulnerable and other nonprofit organizations.

Nonprofit and Voluntary Sector Quarterly, Vol. 20, No. 4, 445-460 (1991)
DOI: 10.1177/089976409102000407


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