Selling Out? A Cross-National Exploration of Nonprofit Retail Operations

Nonprofit revenue sources have significant consequences for how we understand the sector, its power, and sources of accountability. Earned income is an important element of the nonprofit revenue mix. And while commercialism among nonprofits has received some attention, there has been relatively little research seeking to understand the types of earned income that nonprofits are using and the non-commercial, mission-enhancing objectives that these activities potentially serve. This research note addresses that gap through an analysis of one type of earned income: retail operations. The note begins by situating retail within the wider literature on nonprofit revenue, and then introduces the concept of a nonprofit retail operation (NRO). It then introduces a typology of NRO formats, distinguished by the objectives that they serve. Next, it provides descriptive cross-national data on NROs using a dataset of 22 leading international non-governmental organizations in 12 countries. Finally, it discusses areas for future NRO research.

The Role of State Revenue Structure in the Occurrence and Magnitude of Negative Revenue Variance

A negative revenue variance (also known as a revenue shortfall) is generated when the actual inflow of revenue falls short of the budgeted revenue. In an environment constrained by a balanced budget requirement, a negative revenue variance may result in a compensating cut in program expenditures. As such, it is imperative to explore the drivers of negative revenue variance. To answer these questions, we take a look at the states’ revenue mix, specifically, the diversification and elasticity of a state’s revenue structure. We establish a quantitative model to capture factors that affect the occurrence and magnitude of negative revenue variance. Our findings suggest that revenue diversification reduces both the occurrence and the size of a negative revenue variance. Elasticity, on the contrary, increases the occurrence but reduces the magnitude of the negative revenue variance. These findings provide additional evidence for the importance of fiscal planning and design of revenue structure that includes consideration of both diversification and elasticity of the revenue portfolio. Specifically, elasticity and diversification can be used in tandem to address an existing revenue shortfall.

Assessing the Technical and Allocative Efficiency of U.S. Organic Producers

We develop measures of technical and allocative efficiency of producers in marketing certified organic products. A stochastic output distance frontier and the associated revenue share equations are estimated using comprehensive U.S. data on certified organic producers. Farm-level measures of technical efficiency are calculated and factors that enhance performance are identified. Factors that systematically influence allocative efficiency are assessed. The revenue mix of organic producers is systematically inefficient as both male and female producers rely too heavily on revenue from organic markets relative to conventional outlets.