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Exploring the link between government funding and efficiency in nonprofit colleges
Author(s) -
Coupet Jason
Publication year - 2018
Publication title -
nonprofit management and leadership
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.844
H-Index - 54
eISSN - 1542-7854
pISSN - 1048-6682
DOI - 10.1002/nml.21309
Subject(s) - data envelopment analysis , government (linguistics) , state (computer science) , business , state government , public administration , public economics , set (abstract data type) , public relations , accounting , economics , political science , local government , mathematical optimization , philosophy , linguistics , mathematics , algorithm , computer science , programming language
Previous literature has suggested that federal funding can hinder the efficiency of nonprofit organizations, but this has yet not been empirically tested. This study used a two‐stage data envelopment analysis (DEA) model to measure the efficiency of a set of private nonprofit teaching‐oriented colleges, then estimate the impact of federal and state funding on organizational efficiency. The findings indicate that, on average, increases in neither state nor federal funding effect efficiency of nonprofit colleges. Increasing state funding negatively impacted the efficiency of public colleges ( N = 799). This study suggests that the challenges for nonprofits that accompany government funding may not rise to a quantifiable negative effect on efficiency.