Does Revenue Diversification Really Improve Mission Performance? Evidence from a Sample of Human Service Nonprofits

Hung, ChiaKo; Tsai, Chin-Chang; Wu, Wei-Ning

doi:10.1080/15309576.2024.2382443

Cited by 10Nonprofit Sector and VolunteeringCommunity Development and Social ImpactAccounting and Organizational Management

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Does Revenue Diversification Really Improve Mission Performance? Evidence from a Sample of Human Service Nonprofits

Hung, ChiaKo, Tsai, Chin-Chang, Wu, Wei-Ning·2024·Public Performance & Management Review

DOI 10.1080/15309576.2024.2382443

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Abstract

While our understanding of the relationships between revenue diversification and nonprofit financial health has deepened over the past three decades, little is known about the association between revenue diversification and nonprofit mission performance. Moreover, there is an ongoing debate as to whether revenue diversification hinders or improves nonprofit performance. Some expect performance improvement from diversification strategies, while others contend that concentration strategies drive performance. This study aims to fill this research gap by investigating the effect of revenue diversification on nonprofit managers’ perceived mission performance. Using data from a sample of Taiwan’s human service nonprofits collected in 2020, we estimate relationships with regressions, employing a more detailed measure of organizational performance and various revenue diversification measurements. The results suggest that revenue diversification is positively associated with nonprofit managers’ perceived mission performance. This study further discusses theoretical contributions to the literature and practical implications for human service nonprofit organizations.

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The scholarly focus on revenue diversification and legitimacy is underdeveloped and lacks an established epistemology, resulting in conflicting discourses about key factors that establish legitimacy.
“However, this area of scholarly focus is underdeveloped, and the topic lacks an established epistemology (Hung et al., 2024), resulting in conflicting discourses about key factors that establish legitimacy within this field.”
From Understanding Government-Nonprofit Funding Agreements in Human Service Organizations Using Resource Dependence Theory and Organizational Legitimacy (2026) · cites this paper as Hung et al., 2024

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Authors: Hung, C., Tsai, C.-C., & Wu, W.-N.
Affiliations: University of Pennsylvania (US)
National Sun Yat-sen University (TW)
Corresponding author: Tsai, Chin-Chang
ORCID: Hung, ChiaKo
Tsai, Chin-Chang
Wu, Wei-Ning
Venue: Public Performance & Management Review
Publisher: Informa UK Limited
Published: 2024-07-27
Volume: 47
Issue: 6
Pages: 1512-1534
ISSN: 1530-9576 (ISSN-L)
1557-9271
DOI: 10.1080/15309576.2024.2382443
OpenAlex: W4401049252
Cited by: 5
References: 61
Citations by year: 2026: 3 · 2024: 2
FWCI: 3.60
Type: journal article
Language: en
Open access: closed
Locations: Public Performance & Management Review (publishedVersion)
Funders: College of Management, National Sun Yat-sen University (CMNSYSU-SRS-2022-01)
Topics: Social Sciences › Sociology and Political Science › Nonprofit Sector and Volunteering
Social Sciences › Economics, Econometrics and Finance › Finance › Community Development and Social Impact
Social Sciences › Business, Management and Accounting › Accounting › Accounting and Organizational Management
Keywords: income diversification, nonprofit financial health, organizational performance, perceived performance, nonprofit management, focus strategy, Taiwan

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Does Revenue Diversification Really Improve Mission Performance? Evidence from a Sample of Human Service Nonprofits

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