Can tax regulations moderate revenue diversification and reduce financial distress in nonprofit organizations?
Fecha
2022Versión
Acceso abierto / Sarbide irekia
Tipo
Artículo / Artikulua
Versión
Versión publicada / Argitaratu den bertsioa
Identificador del proyecto
Impacto
|
10.1111/apce.12370
Resumen
As a result of policies to reduce public deficit, nonprofit organizations have been forced to turn to charitable donations in order to diversify their revenue structure and thus reduce their levels of financial distress. Public administrations have supported this process through tax mechanisms designed to provide a legal framework that will encourage private philanthropy. Our aim is to analyse th ...
[++]
As a result of policies to reduce public deficit, nonprofit organizations have been forced to turn to charitable donations in order to diversify their revenue structure and thus reduce their levels of financial distress. Public administrations have supported this process through tax mechanisms designed to provide a legal framework that will encourage private philanthropy. Our aim is to analyse the role of nonprofit tax regulations in moderating the influence of revenue diversification on insolvency risk. To this end, we drew a sample of 406 nonprofit organizations located in Aragon and Navarre, two European regions with different tax regulations, for the period 2008-2018. Our results reveal that some tax regime requirements, such as the organizational purpose, minimum initial endowment, engagement in commercial activity, and accountability and monitoring standards, have a positive impact on revenue diversification and the reduction of financial distress and vulnerability. However, we also detect differences between regions which suggest that tax harmonization for nonprofit organizations remains a challenge. [--]
Materias
Financial distress,
Nonprofit,
Revenue structure,
Tax regulations
Editor
Wiley
Publicado en
Annals of Public and Cooperative Economics, 2022, pp. 1-42
Departamento
Universidad Pública de Navarra. Departamento de Economía /
Nafarroako Unibertsitate Publikoa. Ekonomia Saila
Versión del editor
Entidades Financiadoras
Universidad Nacional de Educación a Distancia, Grant/AwardNumbers: P/15/19/PID2019-104304GB-I00, and PID2019-107822RB-I00, funded by MCIN/AEI/10.13039/501100011033