Revenue structure and nonprofit borrowing

Wenli Yan, Dwight V. Denison, J. S. Butler

Research output: Contribution to journalArticlepeer-review

65 Scopus citations


The capital structure of nonprofit organizations plays a crucial role in their sustainability and development. This article explores the extent to which revenue diversification is incorporated into the leverage decision. In addition, this study investigates whether government grants have an impact on the long-term liabilities of nonprofit organizations. A model of nonprofit borrowing is proposed and examined with a national sample of arts, culture, and humanities nonprofit organizations. Model estimates show that nonprofit organizations with higher degree of revenue diversification are more likely to issue debt, but do not necessarily have higher debt ratios. Arts organizations with more government financial support are also more likely to issue debt and to have higher leverage ratios.

Original languageEnglish
Pages (from-to)47-67
Number of pages21
JournalPublic Finance Review
Issue number1
StatePublished - Jan 2009


  • Debt financing
  • Government subsidy
  • Nonprofit capital structure
  • Revenue diversification

ASJC Scopus subject areas

  • Finance
  • Economics and Econometrics
  • Public Administration


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