Understanding Nonprofit Financial Matters: Mixing Theory and Practice

NEW BOOKS

Financing Nonprofits: Putting Theory into Practice
edited by Dennis R. Young

In recent years, charities have experienced a great deal of financial turmoil, and many organizations are suffering because they just don’t understand how best to pay for their operations, writes Dennis R. Young, a professor of private enterprise at Georgia State University and this book’s editor.

A project of the National Center on Nonprofit Enterprise, of which Mr. Young is president, this book calls on both academic experts and charity leaders to come up with theories and principles to help nonprofit groups manage their finances. The authors include questions at the end of every chapter to help charity leaders apply financial theories to their daily operations.

Fifteen articles are organized into five sections. The introduction, by Mr. Young, argues that the financial situation of nonprofit groups is very different from that of businesses and government, and deserves “its own theory and principles so that nonprofit leaders and managers can manage their scarce resources as effectively as possible.”

Part two explains different sources of support, including commercial ventures, foundation and corporate philanthropy, and donated services from volunteers; the third part explores sources of both social and financial capital, such as collaboration and bartering with other groups and the use of debt.

The fourth section focuses on understanding and managing an organization’s income and asset portfolios and other aspects of its financial health. The final one attempts to synthesize all of the previous sections to create “a normative theory of nonprofit finance” and suggests directions for future research.

“It does not simply suffice to beg and borrow from corporate and public finance in order to patch together, in an ad hoc manner, answers to the finance issues of nonprofit organizations,” writes Mr. Young.

Publisher: AltaMira Press, 4501 Forbes Boulevard, Suite 200, Lanham, Md. 20706; (301) 459-3366; fax (301) 429-5748; http://www.altamirapress.com; 428 pages; $39.95; ISBN 0-7591-0989-3.