Nonprofits' Societal Functions: How does the Portfolio of Funding influence the Adoption and Fulfillment of Functions of NPO?

Federal Ministry for Science and Research

Over the last decades, the mode of public funding of non-profit organisations has fundamentally changed in Austria: since 1990, public grants have been gradually replaced by public contracts. These shifts have raised the longstanding discussions about consequences of non-profits dependence on public funding for their contributions to society, particularly regarding nonprofits main civic functions. Against the background of this debate, the first part of my thesis identifies the various functions nonprofits fulfil in general. To this end, I conducted interviews with CEOs of ten Austrian nonprofits and analysed them by qualitative content analysis. Based on the findings, I developed a conceptual model of nonprofits three main functions: service delivery, advocacy, and community building. Referring to this concept, in the second part of the thesis I investigated whether the level and the type of public funding have an impact on the relative importance of these three functions. Resource dependence theory served as the theoretical background for the investigation. In detail, I examined the theses whether increasing levels of funding from public contracts would decrease the relevance of advocacy and community building, but increase the relevance of the service-delivery function. For the empirical estimation, data from 250 nonprofits in Austria have been used. The results from regression analysis, however, do not support the hypothesis than public funding would suppress advocacy. However, revenues from public contracting have a negative impact on the importance of advocacy and a positive one on the importance of service delivery. Nonprofits engagement in community building is not affected by the type of public funding. Nevertheless, the contribution of resource dependence theory to explain the relevance of nonprofits functions is very small.