A Systems Approach to Revenue Fluctuation in Nonprofit Human Service Organizations
Nonprofit Human Services Organizations (NPO) are normally considered to do all they can to work toward providing clients with optimal services (Bowman, 2011). What has not been considered is the possibility that NPOs sometimes allocate more revenue toward accumulating profit than toward generating services. This study used IRS 990 Forms of 150 private nonprofits from 2009 to 2010 to investigate whether NPOs did this at the peak of the recent recession, a time when there was a strong need for NPOs to increase their level of services. Results showed revenue increased 56%, services increased 1.4%, profit increased 43%, operating margin decreased -15%, and equity balance increased 24%. This study raised issues of social justice in how some NPOs manage their finances, as well as augmenting social workers’ understanding of how NPOs can successfully serve their communities.