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The financial environment of Latino nonprofit organizations in western Massachusetts: An exploratory study

Juan Cruz, University of Massachusetts Amherst


This study was designed to analyze the sources of revenue, revenue variability, program and personnel changes, and the fiscal soundness of six Latino nonprofit organizations (LNPOs) in three major cities in Western Massachusetts, for the period 1989 to 1992. Income variability was assessed for the period 1985 to 1992. Contingency or adaptive theory formed the basis of the study, with emphasis on organizational uncertainty, and the concepts of complexity and chaos. Contingency theory holds that there is no best way to organize, and that any way of organizing is not equally effective. The review of the literature was exhaustive and presented an analysis of the history, economic impact, and relationship of both LNPOs and non-LNPOs with the modern welfare state. IRS Form 990 and Form PC, filed by the six LNPOs with the Public Charities Division of the Massachusetts Attorney General, was the source of the data for this study. The study concluded that the aggregate reliance of LNPOs on government sources of revenue was 79.5 percent. Diversity of the funding base of these LNPOs was very limited. The average rate of revenue increase for 67 percent of these LNPOs ranged from 14 percent to 72.3 percent. The influence of revenue variability on the program mix and primary personnel was not as conclusive. Revenue increases correlated more with salary increases of primary personnel than with increases in the number of programs. Revenue increases correlated with salary increases of the rank and file for four of the six LNPOs. Fifty percent of the LNPOs in the study were rated as fiscally sound. None of the six LNPOs had contingency reserves and endowment funds. The most compelling recommendations for improving the infrastructures of these LNPOs include: the expansion of their funding base; the establishment of contingency reserves and endowment funds; effect changes in management and in governance; improve technology; and develop partnership with area colleges and universities for developing degree programs for managers of NPOs, and programs and workshops aimed at providing technological assistance to LNPOs.

Subject Area

Management|Business education|School administration

Recommended Citation

Cruz, Juan, "The financial environment of Latino nonprofit organizations in western Massachusetts: An exploratory study" (1994). Doctoral Dissertations Available from Proquest. AAI9510459.