Portfolio Theory and Nonprofit Financial Stability

Research output: Contribution to journalArticlepeer-review

70 Scopus citations


This article models and tests for the factors that influence financial predictability for a nonprofit organization. Financial portfolio theory is used to model a nonprofit organization's optimal combination of revenue streams in order to minimize financial risk. The optimal combination of funding from government and other sources depends on the variance and covariance between the sources of revenue. Data from nonprofit foster care organizations in New York State are used to show that nonprofit organizations that are more dependent on government funding as a source of revenue have more predictable revenues.

Original languageEnglish (US)
Pages (from-to)105-119
Number of pages15
JournalNonprofit and Voluntary Sector Quarterly
Issue number2
StatePublished - Jun 1993
Externally publishedYes

ASJC Scopus subject areas

  • Social Sciences (miscellaneous)


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