Uniting public funds and private donors’ financing to support nonprofit organizations

Russia since recently has had a growing number of federal grant programs to social service oriented nonprofit organizations working in different sectors from education to healthcare and sports, and in some others. There have also been growing demands to evaluate these programs. Russias federal agencies do not have a common approach to imposing co-financing requirements on grant beneficiaries. We use the data provided in the reports filed to the Ministry of Economic Development of the Russian Federation by its grant recipients of F.Y. 2011-012 to evaluate how much the government funding affects nonprofits financing by other donors. We also evaluate how co-financing from private donors affects the results achieved by the nonprofit. Basing on L. Salamons and R. Steinbergs crowdingout and crowding-in theories we hypothesize that government spending in Russia helps pool other donors resources rather than crowds them out. We processed self-reported quantitative data, presented in the official reports, and performed a relevant ex-post correlation analysis to show that government financing of social service oriented nonprofits in Russia is more likely to have a positive effect on nonprofits achieved results and the attraction of extra funds. Public funding helps draw in other nonprofits resources, for-profits financing, other public agencies resources, private donations, and foreign donors funding. Some private funding resources are also positively correlated with some of the major results achieved by the nonprofit. Co-financing from Russian nonprofits, citizens, foreign and international organizations, and presidential grants is positively related to the results of the beneficiary. The causality of the correlations is still to be researched. In general, we argue about a high level of efficiency attained by service nonprofits that obtained public funding.