The Scale of Mission-Embeddedness as a Nonprofit Revenue Classification Tool: Different Earned Revenue Types, Different Performance Effects

Abstract

Nonprofits rely on earned revenue to remain sustainable. Prior studies have generally aggregated all earned revenue and evaluated its influence on financial sustainability. Our study takes a different approach, assessing the effects of three different types of earned revenue on an immediate program outcome. We use Cultural Data Project data from 2,000 arts and culture nonprofits from 2004-2012. We find that embedded and integrated earned revenue are linked to better program outcomes while external earned revenue is related to poorer program outcomes. Results depend on type (performing vs. visual arts) and funding structure (donative vs. commercial).