The Effects of External Financial Support on the Capacities of Educational Nonprofit Organizations

Oto Potluka and Lenka Svecova
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Lenka Svecova: MIAS School of Business, Czech Technical University, Kolejní 2637/2a, 160 00 Prague, The Czech Republic

Sustainability, 2019, vol. 11, issue 17, 1-13

Abstract: Official development assistance provides an immense flow of financial funding to educational nonprofit organizations (NPOs). This source of funding faces criticism because of the unintended indirect effects it has in lowering the relative level of local NPOs’ capacities. Our contribution addresses NPOs’ financial capacities in an OECD country that receives a vast inflow of EU funding; namely the Czech Republic. To answer the research question on what impact the external financial assistance has on capacities in NPOs, we applied propensity score matching to a sample consisting of 633 educational NPOs covering the years 2006–2013. EU-funded NPOs report higher levels of real revenues, but not real assets, than non-funded NPOs. The EU funding helps in the short-term to improve NPOs’ budgets, but not to increase assets.

Keywords: nonprofit organizations; financial capacities; assets; cohesion policy; the Czech Republic (search for similar items in EconPapers)
JEL-codes: O13 Q Q0 Q2 Q3 Q5 Q56 (search for similar items in EconPapers)
Date: 2019
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