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Changes in the scope and structure of public sector funding over the past few decades have had significant effects on the organizational environment in which nonprofit organizations operate. This article presents an integrative model within which the empirical literature regarding government funding effects on nonprofits is reviewed. This model conceptualizes the effects as deriving from two discrete forces – supply dynamics that have immediate population-level influences and a set of implementation dynamics that shape competition via organizational effects. This integrated model provides coherence to the literature and supplies a framework for future research.

The Impact of Government Funding on Competition in the Nonprofit Sector: An Integrative Model and Review of Empirical Research