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Revenue Diversification and Investment Policy: The Case for Nonprofits

Author

Listed:
  • Patricia Hatfield

    (Bradley University, USA)

  • Sandra Richtermeyer

    (Xavier University, USA)

  • Shelly Webb

    (Xavier University, USA)

Abstract

Nonprofit organizations (NPOs) develop an investment policy for the investing of net assets. The NPO literature is void of studies that explain why some NPOs invest conservatively while others invest aggressively. Recent literature has focused on the importance of revenue diversity for NPOs. Findings suggest that the more diverse the revenue sources the more prepared the NPO is to avoid financial distress. Our study examines whether revenue diversity and investment policy are strategically related. We find that NPOs with fewer revenue sources are more likely to invest in risk-free assets and bonds and avoid risky securities.

Suggested Citation

  • Patricia Hatfield & Sandra Richtermeyer & Shelly Webb, 2014. "Revenue Diversification and Investment Policy: The Case for Nonprofits," Journal of Applied Management and Investments, Department of Business Administration and Corporate Security, International Humanitarian University, vol. 3(4), pages 214-219.
  • Handle: RePEc:ods:journl:v:3:y:2014:i:4:p:214-219
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    Cited by:

    1. Anurag Agarwal & Ajay Verma & Rajiv Kumar Agarwal, 2016. "Factors Influencing the Individual Investor Decision Making Behavior in India," Journal of Applied Management and Investments, Department of Business Administration and Corporate Security, International Humanitarian University, vol. 5(4), pages 211-222, November.
    2. Labiba Tazkia & Ramit Azad & Tamanna Islam, 2017. "Contribution of Operations Manager in a Nonprofit Organization in Bangladesh," Journal of Applied Management and Investments, Department of Business Administration and Corporate Security, International Humanitarian University, vol. 6(2), pages 130-137, May.
    3. Anatoliy G. Goncharuk, 2015. "Application of the Investment Theory in Research and Practice," Journal of Applied Management and Investments, Department of Business Administration and Corporate Security, International Humanitarian University, vol. 4(2), pages 119-126.

    More about this item

    Keywords

    nonprofits; diversification; investment policy; risk;

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