Nonprofit Finance: A Synthetic Review

The field of finance is concerned with the management of money and how and where such funds are acquired and used. This article reviews the broad literature on finance related to nonprofit and voluntary organizations, identifies gaps in knowledge, and proposes potential avenues for future researchers. It examines in detail the sources of funds for nonprofit organizations, especially nonprofit agencies—including issues around revenue portfolios and interactions, the uses of these funds—with an emphasis on incentives faced by nonprofit organizations around financial disclosures, the benefits and problems of slack resources and profits, and issues of capital structure in nonprofit organizations.