Dissertation/Thesis Abstract

Resource Allocation Decisions of Nonprofit Organizations
by Kotsi, Telesilla Olympia, Ph.D., Indiana University, 2020, 146; 28086022
Abstract (Summary)

Nonprofits face unique operational challenges. They have decoupled groups of stakeholders: donors who fund nonprofit operations, employees who organize those operations and beneficiaries on the receiving end. Nonprofits also operate in complex conditions due to natural disasters and armed conflicts. Donors, beneficiaries, and operational conditions affect all levels of a nonprofit’s resource planning: strategic, tactical, and operational.

My first study examines strategic planning of nonprofits serving refugees. With a game theory model completely informed by field research, I seek conditions under which cash, on top of in-kind assistance, benefits both refugees and the host community (residents and retailers). With cash, refugees purchase goods and thus the retailer benefits. However, the purchases due to cash lead to price increases, ultimately lowering residents’ and refugees’ buying power. I propose that the nonprofit partners with the government to impose price regulations that can curb retailer’s market power and increase social welfare.

My second study examines tactical planning of nonprofits. Nonprofits must allocate their expenses among three categories of spending: program spending to deliver services to beneficiaries; fundraising spending to raise donations; and administration spending to build capacity. When nonprofits spend money on programming, they have an immediate reward: satisfying beneficiaries’ current needs. When nonprofits spend money on fundraising, they have a future reward: increasing their future budget. Administration spending renders future budgets more impactful. I use dynamic programming to analyze the nonprofit intertemporal tradeoffs regarding budget allocation. Using public financial data, I apply my model to the decision-making of a foodbank and a poverty-fighting nonprofit.

My third study examines operational planning of an international nonprofit with high transportation costs. Each nonprofit regional field office can rent or subcontract vehicles. Subcontracting is less expensive in the short term, whereas renting is less expensive in the long term. However, subcontracting increases security concerns since the organization uses third-party personnel. This is further complicated by operational conditions that include natural disasters and armed conflicts. I use transportation and personnel expenses from twenty-four regional offices over twelve years to build an empirical model that informs the nonprofit’s transportation decisions worldwide. Such decisions are important for budgeting and communication with headquarters and donors.

Indexing (document details)
Advisor: Pedraza-Martinez, Alfonso J.
Commitee: Wu, Owen, Yan, Lucy, Bretthauer, Kurt M.
School: Indiana University
Department: Business
School Location: United States -- Indiana
Source: DAI-A 82/2(E), Dissertation Abstracts International
Source Type: DISSERTATION
Subjects: Management, Operations research
Keywords: Allocation, Budget, Nonprofits, Refugees, Transportation
Publication Number: 28086022
ISBN: 9798664753592
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