Nonprofit competition in the grants marketplace

Abstract

In this study, we test the impact of nonprofit financial health and financial efficiency ratios on the grant amount awarded by foundations using the Georgia grants marketplace as a case. Using hierarchical linear modeling analysis, we can understand the effects of these ratios both within and across foundation grant portfolios. We found statistically significant evidence that grantees with higher debt ratios and higher fundraising ratios receive lower grant amounts. We did not find statistically significant impacts for administrative ratios, revenue diversification, and surplus margin.