Revenue Embeddedness and Competing Institutional Logics: How Nonprofit Leaders Connect Earned Revenue to Mission and Organizational Identity

Abstract

The increasing reliance on earned revenue displayed by nonprofits in the US has raised mission-related organizational identity concerns. However, the effect of a market-driven activity on mission-driven service may vary based on revenue embeddedness: the activity’s connection to the organization’s mission. This study draws on the competing logics of isomorphism and resource dependence to examine how the pursuit of earned revenue affects the organization’s perception of its mission and projection of identity. The authors examine how leaders use language to connect market to mission, presents additional dimensions of embeddedness, and offers propositions for future research.