| Increasingly, social workers and line staff of nonprofit organizations are engaged in the management of financial resources (Lohmann & Lohmann, 2008). Although the literature suggests that nonprofit organizations engage in market-based social enterprise activities to generate revenue, the financial consequences of social enterprise on nonprofit organizations is unexplored in the literature. This dissertation "data mines" (Epstein, 2010) the IRS 990 forms of 166 nonprofit organizations that are self identified operators of social enterprises to explore revenue, expenses, net assets and excess/deficits of nonprofits that engage in one or more industry affiliated social enterprises. Transaction cost and resource dependence theories are used to explore how intensity and diversity of social enterprise activity are reflected in the financial disposition of these organizations. The study's findings are mixed: there is evidence that intensity of social enterprise activities and the industries affiliated with this sample of largely human service based organizations both erode and contribute to increased organizational efficiency. Throughout the study, the ability to measure financial performance of nonprofits is a continuous challenge. However, Chang & Tuckman's (1991) financial vulnerability indices prove to be a useful tool to assess the financial condition of these organizations. Both the methodology and findings offer social workers and other students of nonprofit management tools to appreciate the financial levers with nonprofit organizations and insights into the financial structure of nonprofits that engage in social enterprise. |
