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DOI: 10.29141/2658-5081-2021-22-4-6 JEL classification: L31
Anna S. Artamonova Vologda Research Center of the Russian Academy of Sciences, Vologda, Russia
Financial resources management and assessment
of the non-profit sectorâ€™s social efficiency
Abstract. During the pandemic, the non-profit sector has seen both a significant increase
in the volunteer movement and the exacerbation of existing problems due to the imposed
restrictions, most notably related to the financing of non-profit organisationsâ€™ activities and
fundraising. The paper aims to assess the social efficiency of the non-profit sector with respect to the management of financial resources. Methodologically, the research relies on the
resource dependence theory. The assessment uses the calculation of the Weisbrod publicness index. Traditionally, this index employs data from individual organisations, as there are
no comparable data for the entire sector. The study, for the first time, attempts to conduct
a comprehensive assessment based on data on socially oriented non-profit organisations
(SONPOs) collected by Rosstat. To test the approach, the author considers the results of the
financial activities of SONPOs located in the regions of the Northwestern Federal District
for 2017â€“2019. The findings indicate that in Pskov oblast, Nenets Autonomous Okrug, and
the Komi Republic, the SONPOsâ€™ sector relies almost solely on self-financing; in the Republic of Karelia, Arkhangelsk and Vologda oblasts donor funding prevails; other regions enjoy
a balance between revenues from the production of public and private goods. Keeping such
a balance appears to be the optimal model for the sectorâ€™s functioning, since it testifies SONPOsâ€™ ability to manage their resources.
Keywords: social efficiency; non-profit sector; socially oriented non-profit organisation;
Weisbrod publicness index.
Acknowledgements: The research is funded by the Russian Foundation for Basic Research
(RFFI) within the framework of the research project no. 19-011-00724 A â€œBarriers to civic
participation and mechanisms for their overcoming at the regional levelâ€).
For citation: Artamonova A. S. (2021). Financial resources management and assessment of
the non-profit sectorâ€™s social efficiency. Journal of New Economy, vol. 22, no. 4, pp. 97â€“115.
Received June 28, 2021.
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The non-profit sector or the third sector is one of the actors in economic activity
and plays a prominent role in public life. The demand for its services is growing1
especially during periods of crisis, as it was in 20202
. At the same time, the third sector
itself has encountered the fact that the problems which constitute the most serious
barriers to its functioning have noticeably aggravated3
[Kim, Mason, 2020; Searing,
Wiley, Young, 2021]. It is primarily about the issue of attracting financial resources
necessary for performing its activities [Artamonova, 2020], as the non-profit sector
has to produce more social effects for society operating in new conditions.
Non-profit organisations (NPOs) receive the main financial support in the form
of grants, subsidies, etc. from public authorities and membership fees and / or donations from individuals and legal entities [Mersiyanova, 2016]. However, the ability
to attract additional funds is becoming increasingly important for the development
of the sector. In Russia, this is a part of professionalsâ€™ tasks only in 7 % of NPOs
[Mersiyanova, 2016], while in developed countries the fundraising system is a common practice and is even recognised as a competitive environment, where non-profit
organisations are forced to some extent compete with enterprises pursuing similar
goals [Kim, Lee, 2018; Yang, Lee, Kim, 2018].
In such conditions, the ability of non-profit organisations to manage financial resources is essential. On the one hand, we are talking about an internal audit, which
allows some NPOs to reveal the resource provision specifics of their activities and
adjust the way of fundraising. On the other hand, we should take into consideration
that the third sector as a set of non-profit organisations and private civic practices
(non-associated participation) is a major economic actor along with the public and
private sectors [Dvoryadkina, Prostova, 2019]. This makes the need to assess the ability of the third sector organisations to manage available resources increasingly essential, since the results of this assessment are significant for both the development
of state policy in relation to the entire non-profit sector and identification of factors
that contribute or hinder the realisation of its potential [Borisova, Polishchuk, 2009].
In countries with the most developed third sector, the discussion about the problem
of organising its economic activity on the basis of business principles has remained
1 56 % of Nonprofits Canâ€™t Meet Demand. The NonProfit Times, 2014. https://www.thenonprofittimes.com/
npt_articles/56-of-nonprofits-cant-meet-demand/; New Jersey non-profits: Trends and outlook. Annual survey.
(2019). Center for non-profits. https://www.njnonprofits.org/2019AnnualSurveyRpt.pdf. 2 Demands on Nonprofit Groups Rose in the Pandemic, Even as Volunteering Fell. https://www.nytimes.
com/2020/11/13/your-money/nonprofit-groups-volunteers-pandemic.html; HSE: A public request for volunteers
help and non-profit organizations has grown during the pandemic. https://dobro.press/novosti/issledovanie-vshev-rossii-vyros-spros-na-nko-i-volonterstvo. (in Russ.) 3 The impact of Covid-19 on nonprofits in Europe. https://efa-net.eu/wp-content/uploads/2020/12/Nonprofit_
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relevant for many years. By introducing traditional business tools in management,
marketing, project and personnel management, non-profit organisations increase
their economic sustainability. This can be seen in their ability to achieve both current
and long-term statutory goals1
. At the same time, the most successful NPOs are often
criticised for pursuing private interests instead of public ones, the lack of transparency
in the process of distributing collected funds, and the lack of information on financial
transactions available for the public [Viravaidya, Hayssen, 2001, p. 3; Tortajada, 2016].
In addition, some abstractness of the goals of non-profit organisations predetermines
the absence of uniform methods for assessing the degree of achievement of these
goals. This explains scientific and practical interest in the problem of assessing the
efficiency of the third sector.
It is generally accepted that non-commercial activity cannot be assessed only from
the standpoint of the economic effects produced due to its non-profitability. In this
regard, the attention is drawn to the social efficiency of NPOs, which reflects the
degree to which they achieve the main goals of their work [Shekova, 2010; Zhukov,
2018] and to some extent allows us to correlate economic costs and produced social
Most of the existing methodological approaches provide for the analysis of the
performance of NPOs based on internal data. At the same time, an assessment of the
totality of these organisations would present a picture of the third sector development
at the system level. The study attempts to undertake such comprehensive assessment
based on data collected by Russiaâ€™s Federal State Statistics Service (Rosstat) concerning the results of the financial activities of socially oriented non-profit organisations
(SONPOs). The calculation of the Weisbrod publicness index was chosen as the most
appropriate methodological approach.
The purpose of the study was to determine the optimal strategy for managing the
financial resources of SONPOs based on the assessment of their social efficiency. The
Northwestern Federal District was chosen for testing of the approach and assessment
of the possibility of its further application on the basis of data on all Russian SONPOs.
This purpose predetermined the need to accomplish the following objectives:
â€¢ to analyse the dynamics and structure of revenues of socially oriented non-profit
organisations of the Northwestern Federal District in 2017â€“2019;
â€¢ to calculate the Weisbrod publicness index and assess its dynamics in 2017â€“2019;
â€¢ to identify the prevailing type of financial resources management in the SONPOs
sector in the selected federal district.
1 NPO Guide: Economic Sustainability. https://www.asi.org.ru/2020/11/10/putevoditel-ekonomicheskaya-ustojchivost/. (in Russ.)
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The problem of assessing the efficiency of the non-profit sector is debatable both in
the scientific community and among practitioners. The principal reason for this is
the nature of non-profit activities themselves: their primary goal is not to make a
profit distributed among the participants, but to solve pressing social problems of the
population. At the same time, the formulations of the goals of NPOs are so varied and
unclear that it is practically impossible to determine the level of their achievements
even within the framework of a particular organisation. The work of Borisova and
Polishchuk [2009, pp. 82â€“83] presents the analysis of the main concepts for assessing
the activities of the non-profit sector (target concept, the concept of system resources,
multiplicity of stakeholders and social constructivism). Moreover, it makes a logical
conclusion that none of them can claim universality and there are significant difficulties in terms of practical application.
The specifics of the economic mechanism of non-profit sector organisations requires the use of special approaches and involves the assessment of both economic
and social activities. Traditionally, indicators of profitability and cost-effectiveness
are used to determine economic efficiency. First of all, this is relevant for the activities of commercial enterprises aimed at maximising profits of the owners. At the same
time, similar approaches are applied in relation to NPOs. Thus, researchers attempted
to analyse the activities of the non-profit sector on the basis of the intersectoral balance. Comparison of the indicators of the USA and Germany made it possible to conclude that the third sector is more sensitive to changes in government policy and the
level of household income, and less sensitive to fluctuations in other sectors [Anheier,
Rudney, 1998, p. 22]. This approach is most acceptable when assessing the efficiency
of specific non-profit organisations which perform specific tasks and which results
can be measured. For example, this result can be the number of houses repaired or
rebuilt [Coupet, Berrett, 2018]. It is also much easier to assess the performance of a
specific organisation, rather than the sector as a whole. In particular, this allows us to
analyse the financial and economic component of work both in general [Zdanovskis,
Pilvere, 2019] and from the standpoint of expenses / income and available resources
[Mihaltan, Vitan, Cucuia, 2015].
In recent decades, traditional methods of analysing enterprise performance have
transformed and take into account social metrics. Organisations, especially large
corporations, carry out social audits to assess the impact of their activities on society [Kemp, Owen, van de Graaff, 2012; Shcherbinina, 2016]. The study of corporate
social responsibility makes a significant contribution to the development of methods for assessing the efficiency of organisations. In this case, one side of the process is commercial business structures, and the other one is social enterprises. Social
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entrepreneurship is defined as â€œa new way of socio-economic activity, which combines the social purpose of the organisation with entrepreneurial innovation and the
achievement of sustainable self-sufficiencyâ€ [Moskovskaya, 2011, p. 15]. The development of such a way of activity stimulates the active development and use of methods
for assessing the efficiency from an economic and a social point of view, not only for
social enterprises, but also for the non-profit sector in general.
Obviously, it is impossible to assess only the economic component of the third sectorâ€™s activities due to its key functions [Ustinova, 2011; Volgunina, 2011]. Great importance is given to the analysis of social results, which reflect the degree of achievement of the main goals of NPOâ€™s activities [Shekova, 2010; Zhukov, 2018]. This is
especially true for Russian realities, where the non-profit sector is gradually being
integrated into the system of social services [Palibina et al., 2017]. The analysis of
the social efficiency of organisations implementing socially significant projects has
become essential. As the researchers note, 70 % of NPOs in the USA make reports on
the assessment of social influence, while in Russia their share does not exceed 40 %
[Rozhdestvenskaya, Boguslavskaya, Bobrova, 2016, p. 11]. First of all, such assessments are carried out by foundations and large (international) non-profit organisations.
One of the most well-known approaches to determine the social effect is the calculation of the social efficiency of investments, or social return on investment (SROI).
The approach was developed in the mid-1990s in the USA and is based on measuring
social value in relation to the expended resources. Its practical application, according to representatives of the non-profit sector, is not always justified, since it requires
financial and time resources, which negatively affects the activities of organisations,
which already experience a shortage of personnel and funds [Gibbon, Affleck, 2008, p.
51]. In addition, the social return on investment ratio is not always calculable due to
the fact that the social effect cannot always be expressed in monetary terms [PÃ¥l Vik,
2017, p. 9]; therefore, it is more reasonable to use it simultaneously with other metrics
[Ryan, Lyne, 2008, p. 229].
Many methodological approaches are based on the focus on internal performance
assessment in accordance with the data collected by the NPO itself based on the results of its activities. Obviously, this is an important and necessary task for any organisation, including a non-profit one. According to resource dependence theory, â€œan
organisation is efficient if it meets the demand of those whose support it needs to continue its existenceâ€ [Pfeffer, Salancik, 2003, p. 60]. At the same time, the assessment
of the aggregate of NPOs makes it possible to present a picture of the development of
the third sector at the system level. If we scale the theory of resource dependence to
sectors of the economy [Kleyner, 2011], it becomes obvious that the non-profit sector
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encounters the need to follow two strategies: diversify revenues and equalise resources [Moulton, Eckerd, 2012, pp. 9â€“10]. On the one hand, the third sector should strive
to reduce dependence on donors and maintain autonomy and freedom to achieve its
goals. On the other hand, its tasks include the production of public goods in the maximum possible volume, which can be achieved by increasing the number of sources
of revenues. The external environment in this case is understood as a set of resource
niches [Pavlyutkin, 2007, p. 222]. Such reasoning evokes associations with the activities of commercial enterprises and is not always understood by the representatives of
the third sector.
In developed countries, the discussion about the problem of organising the nonprofit sectorâ€™s economic activities on the basis of business principles has remained
relevant for many years. Small organisations in this sector introduce business approaches into their activities and thus increase their financial stability [Rozhdestvenskaya, Boguslavskaya, Bobrova, 2016; Petitgand, 2018]. Collaboration between
the non-profit sector and the business tends to have a positive effect on both sides.
Business structures are becoming more â€˜socialâ€™, adjusting development strategies taking into account their impact on society; the third sector is improving management,
planning, and marketing skills [Nielsen, Neergaard, 2018]. The flip side in this case
is the close attention of government agencies and funding organisations to the issues
of spending funds, which can be perceived as pressure [Cazenave, Morales, 2021].
In developed countries, many non-profit organisations are influential participants in
social and economic life. Owning banks, restaurants, clinics, they are criticised for
pursuing private interests instead of public ones [Viravaidya, Hayssen, 2001, p. 3;
Tortajada, 2016]. Criticism concerns mainly the lack of transparency in the distribution of collected funds, the lack of available information on financial transactions, the
vagueness of the goals of non-profit organisations, and the lack of unified generally
accepted methods for assessing the degree to which these goals have been achieved.
The financial aspects of the non-profit sector get the most attention. As it has already been mentioned, the financial basis for the functioning of the non-profit sector is made up of grants, subsidies from public authorities, membership fees and / or
donations from individuals and legal entities. In Western European countries and
the USA, the third sector receives significant government support, while in Japan
and Australia, membership fees and service revenues play a key role [Mersiyanova,
Ivanova, Korneeva, 2015, p. 162]. However, researchers agree that the dependence of
NPOs on a single source leads to a decrease in their autonomy and jeopardises their
sustainability. The success of their work largely depends on the ability of non-profit
organisations to effectively manage financial resources [Yang, Lee, Kim, 2018; Kim,
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In this regard, fundraising, which is an activity to attract resources for the implementation of statutory tasks and projects, is of great importance for the development
of the sector. The specifics of this activity has been studied regularly since the 1980s
and remains relevant today. To improve the methods of attracting resources, the nonprofit sector needs to work to increase public confidence in its work, as well as to look
for new target audiences and fundraising channels [Mersiyanova, Ivanova, Korneeva,
2015, pp. 169â€“170]. Despite the ambiguous attitude of theorists and practitioners to
the â€˜commercialisationâ€™ of this sector, studies show that market orientation has a positive effect on the performance of NPOs [Korneeva, Oiner, 2018, p. 457]. According
to experts, a more comprehensive understanding of the consequences of the transformation of NPOs into business enterprises is necessary, which requires the development of methodological approaches to the analysis of ongoing processes [Maier,
Meyer, Steinbereithner, 2014, p. 16].
One of the most well-known methods for correlating the economic and social
components of the efficiency of the functioning of non-profit organisations is the
calculation of the Weisbrod publicness index (PI), or social index. The Weisbrod
publicness index reflects the relationship between the types of financial revenues
of the enterprise and the nature of the services or products it provides [Weisbrod,
1991, p. 75] and is calculated as the ratio of revenues from the production of public
goods to revenues from the production of private goods. The first type of revenues
is in the form of grants, subsidies, etc., the second type is revenues from the sale
of goods and services, as well as membership fees. The Weisbrod publicness index
is often used as a basic approach for developing assessment methods (cf. Kingma
 for a detailed overview). The Weisbrod publicness index serves as an indicator of the level of self-financing of the non-profit sector: the higher its value, the
lower the level of self-financing of the non-profit sector, and vice versa [Shekova,
There are few studies that use empirical evidence to assess performance based on
the Weisbrod publicness index. An example of testing the method can be the work
where the social index for the Center for the Rehabilitation of the Disabled is calculated [Igonin, 2008], or the publication in which the index was calculated using the
data of the accounting statements of 35 non-profit organisations [Grishchenko, 2016].
In the latter case, the opinion was expressed that low values of the Weisbrod publicness index (high level of self-financing) may serve as the basis for tax audits. There is
also an attempt to calculate the Weisbrod publicness index for several sporting events
[Kylasov, Gureeva, 2019]. The authors point to a limitation imposed by the actual
mathematical rules: for events organised only at the expense of a grant, the index cannot be calculated.
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The major problems identified in the available research are that the activities of the
third sector are characterised by a deficit of accountability [Gibbon, Affleck, 2008, p.
43; Borisova, Polishchuk, 2009, p. 81], and the lack of comparable data on this sector significantly complicates a comprehensive assessment of its development. At the
same time, over the past several years in Russia, an annual survey of the SONPO
sector has been conducted. This allows using the results published by Rosstat as an
empirical basis for calculating the sectorâ€™s efficiency based on the Weisbrod publicness index. The choice of socially oriented NPOs seems to be justified also due to the
fact that they are active elements of the regional space [Dvoryadkina, Prostova, 2020]
and are the core of the Russian third sector. Organisations, which carry out activities aimed at overcoming social problems and developing civil society in the Russian
, are recognised as socially oriented NPOs. At this stage, they are gaining
more and more importance, especially due to the attention paid to them by high-level
public authorities. After securing the status of an executor of socially useful services2
for SONPO, the regional authorities have a task to increase the share of social service
institutions that have a non-state form of ownership (including non-profit ones) to
10 % in the total number of such organisations. The state provides NPOs with the
freedom to choose the most appropriate regulatory legal form for performing their
activities and provides the necessary support, if they choose activities in the areas of
social support, assistance in emergency situations, environmental protection, preservation of historical heritage, legal protection, charity, education, patriotic education,
etc. Support can be provided in terms of finances, property, information, consulting,
as well as training, retraining and advanced training of workers and volunteers. Financial support can come from both the federal budget and the budgets of subjects
of the Russian Federation.
The foregoing makes it possible to utilise the available data to assess the social efficiency of SONPOs to a certain extent extrapolating the results to the Russian third
sector in general.
The study attempts to apply the Weisbrod public index to calculate the social efficiency of SONPOs operating in the Northwestern Federal District. The time period
covers the years 2017â€“2019. The obtained results reflect the most current situation in
the third sector of the specified district.
1 On non-profit organisations: Federal Law of January 12, 1996 no. 7-FL (as amended on December 31, 2017).
http://www.consultant.ru/document/cons_doc_LAW_8824. (in Russ.) 2 On the register of non-profit organisations â€“ performers of socially useful services: Resolution of the Government of the Russian Federation of January 26, 2017 no. 89 (as amended on January 24, 2018). http://www.consultant.ru/document/cons_doc_LAW_211967. (in Russ.)
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The calculation was made according to the formula:
where PI is publicness index.
The revenues from the production of public goods includes the following:
â€¢ targeted revenues (including donations) from Russian commercial organisations,
excluding revenue from endowment capital;
â€¢ targeted revenues (including donations), grants from Russian individuals with
the exception of funds and other property inherited by will;
â€¢ targeted revenues (including donations), grants from Russian non-profit organisations with the exception of grants from non-profit non-governmental organisations
involved in the development of civil society institutions (provided through subsidies
from the federal budget);
â€¢ targeted revenues from the federal budget;
â€¢ targeted revenues from budgets of the subjects of the Russian Federation;
â€¢ revenues from foreign states, their state bodies, international and foreign organisations;
â€¢ targeted revenues from local budgets;
â€¢ money and other property received free of charge from business entities established by the organisation with the exception of targeted revenues (including donations) from Russian commercial organisations and revenues from endowment capital;
â€¢ targeted revenues from the budgets of state extra-budgetary funds;
â€¢ grants from non-profit non-governmental organisations involved in the development of civil society institutions (provided through subsidies from the federal budget);
â€¢ revenues from foreign citizens and people who do not have a citizenship;
â€¢ money and other property inherited by will.
The revenues from the production of private goods includes the following:
â€¢ revenues from the sale of goods, works, services, property rights (except for revenues from endowment capital);
â€¢ revenues from endowment capital;
â€¢ non-operating revenues (except for revenue from endowment capital);
â€¢ other revenues.
The unit of measurement of the Weisbrod publicness index is its absolute value.
The index is equal to zero in organisations, which produce only private goods, i.e.
membership fees or money received from the sale of consumer goods and services.
Large values of the index are typical for organisations engaged exclusively in the creation of public goods, i.e. activities aimed at achieving social effects.
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The first stage of the assessment was to analyse the dynamics of revenues of socially
oriented non-profit organisations in the Northwestern Federal District. In general,
for the period 2017â€“2019 in the district, there were some positive trends in relation to
revenue from the production of both public and private goods (Table 1). This allows
us to conclude that SONPOs receive stable support from donors and at the same time
effectively realise their goods and services.
An increase in the volume of revenues in both directions is observed in the Pskov
and Kaliningrad oblasts, as well as in the Komi Republic. At the same time, in Komi,
the revenues from the production of private goods increased by 5 times, and in the
Kaliningrad oblast, the revenues from the production of public goods increased by 11
times. General negative trends are typical for the Nenets Autonomous Okrug, Saint
Petersburg, Leningrad, Arkhangelsk and Vologda oblasts. The situation in the three
oblasts of the Northwestern Federal District is not so unambiguous: in Novgorod
oblast, there is a decrease in the revenues from the production of private goods and,
at the same time, there is an increase in revenues from the production of public goods.
The opposite situation is observed in the Murmansk oblast and the Republic of Karelia, although the decrease in donor revenues appears to be insignificant (the growth
was 99 % and 92 %, respectively).
The revealed specifics made it necessary to determine the principal sources of revenues for socially oriented non-profit organisations of the Northwestern Federal District. 2019 was taken as a reporting period, which provides the most relevant information.
In the structure of the revenues from the production of private goods, 87 % is
made up of the sale of goods produced by SONPO and the services they provide
(Figure 1). Another large group is other revenues, which include revenues related to
the provision for a fee of the organisationâ€™s assets or rights arising from patents for
inventions and other types of intellectual property, participation in the authorised
capital of other organisations, as well as revenues received as a result of joint activities
or from the sale of fixed assets and assets, interest, fines, penalties, etc. [Avdeev, 2011].
In the structure of revenues from the production of public goods, 69 % of SONPOs
funding was made up of targeted revenue from Russian commercial organisations
and grants from Russian individuals. Another 23 % of revenues came in the form of
grants from Russian NPOs, from the budgets of the subjects of the Russian Federation and from foreign states, their state bodies, international and foreign organisations (Figure 2).
In general, in the district, revenues from the production of public goods are 1.3
times higher than revenues from the production of private goods. If we take absolute
Table 1. SONPOsâ€™ revenues in the Northwestern Federal District, 2017â€“2019
Revenues from the production of public goods,
thousand rubles Growth
Revenues from the production of private goods,
thousand rubles Growth
rate, % 2017 2018 2019 2017 2018 2019
Arkhangelsk oblast 1 029 586 386 761 784 169 76 843 573 811 290 155 214 18
Arkhangelsk oblast without NÐÐž 991 583 377 260 747 128 75 734 890 677 759 150 255 20
Vologda oblast 1 278 572 1 494 842 812 574 64 1 030 161 223 978 168 494 16
Kaliningrad oblast 139 199 205 719 1 593 759 1 145 207 381 677 068 693 000 334
Leningrad oblast 1 251 087 1 392 741 1 022 639 82 605 261 517 369 285 386 47
Murmansk oblast 859 566 980 811 850 771 99 490 265 929 922 653 693 133
Nenets Autonomous Okrug (NAO) 42 851 153 180 26 604 62 162 180 237 987 62 314 38
Novgorod oblast 467 477 284 612 504 126 108 459 586 399 812 356 023 77
Pskov oblast 250 410 599 002 406 298 162 656 652 1 602 321 1 424 254 217
Republic of Karelia 567 431 227 452 524 156 92 130 384 379 977 327 442 251
Komi Republic 765 699 1 308 709 1 339 083 175 272 138 812 713 1 409 187 518
Saint Petersburg 17 879 318 4 965 745 15 566 329 87 14 409 611 1 6245 841 11 334 202 79
Northwestern Federal District 27 374 291 34 799 418 37 656 394 138 25 852 186 27 066 004 28 889 870 112
Source: own calculations based on data from the Unified Interdepartmental Statistical Information System (UISIS). https://fedstat.ru/.
Note: regions are listed alphabetically.
Fig. 1. Structure of the revenues from the production of private goods in the Northwestern Federal District in 2019, thousand rubles
Fig. 2. Structure of the revenues from the production of public goods in the Northwestern Federal District in 2019, thousand rubles
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values as a basis, to some extent this allows speaking about predominantly donor financing of the non-profit sector. At the same time, in order to formulate reasonable
conclusions, it is advisable to correlate the revenues of the non-profit sector.
At the next stage of work, the publicness index was calculated for the regions of the
Northwestern Federal District (Table 2). Calculations revealed that in 2019 socially
oriented NPOs of the Pskov oblast, the Nenets Autonomous Okrug and Komi were
almost completely self-financing.
Table 2. The publicness index in the Northwestern Federal District, 2017â€“2019
Region 2017 2018 2019 Change in 2019
Pskov oblast 0.38 0.37 0.29 â€“0.09
Nenets Autonomous Okrug 0.26 0.64 0.43 +0.17
Komi Republic 2.81 1.61 0.95 â€“1.86
Murmansk oblast 1.75 1.05 1.30 â€“0.45
Saint Petersburg 1.24 0.31 1.37 +0.13
Novgorod oblast 1.02 0.71 1.42 +0.4
Republic of Karelia 4.35 0.60 1.60 â€“2.75
Kaliningrad oblast 0.67 0.30 2.30 +1.63
Leningrad oblast 2.07 2.69 3.58 +1.51
Vologda oblast 1.24 6.67 4.82 â€“3.58
Arkhangelsk oblast without NAO 1.35 0.56 4.97 â€“3.62
Arkhangelsk oblast 1.22 0.48 5.05 â€“3.83
Northwestern Federal District 1.06 1.29 1.30 +0.24
Source: own calculations based on UISIS data. https://fedstat.ru/.
Note: regions ranked by publicness index value in 2019.
From the assessment of the publicness index dynamics it is clear that the most significant changes are characteristic of the Arkhangelsk and Vologda oblasts. In 2019,
there was a noticeable shift towards funding from donor funds.
The application of the theory of resource dependence to the activities of non-profit
organisations suggests two strategic objectives for the sector. Revenue diversification
means the non-profit sector strives to reduce its dependence on donors and maintain
its autonomy. Organisations, which are able to generate profits on their own, are also
more efficient in regulating their administrative costs [Ecer, Magro, Sarpca, 2017].
Equalisation of resources involves the production of public goods as much as possible
by increasing the number of sources of revenues. In this case, however, it is necessary
to correlate the available resources with specific tasks. Thus, researchers have found
that an increase in donations from individuals is associated with a higher level of civic
participation, and an increase in revenues from government has a positive correlation
110 Journal of New Economy 2021â€¯â€¢â€¯Vol.â€¯22â€¯â€¢â€¯No.â€‰4
Regional Aspects of Economic Growth
with activities to protect the rights of citizens, but negative one â€“ with the formation
of social capital [Moulton, Eckerd, 2012, p. 19]. Based on these conclusions, the results of the study can be interpreted as follows.
Socially oriented non-profit organisations with a minimum value of the Weisbrod
publicness index (Pskov oblast, Nenets Autonomous Okrug, Komi Republic) focus
on the performance of functions related to the involvement of the population in the
practice of civic participation, direct support to those in need, and neighborhood
help. This is the reason for the high level of their self-financing: they function at the
expense of private donations and at the same time solve problems corresponding to
their statutory activities, without lobbying for the interests of any major donors. In
the activities of SONPOs, which have the maximum value of the Weisbrod publicness index (Leningrad, Vologda and Arkhangelsk oblasts), the tasks of protecting the
rights and freedoms of citizens, organising communication between the population
and state authorities, and looking for opportunities for the development of the nonprofit sector prevail. The main danger, in our opinion, is that socially oriented NPOs
need to remain independent in the implementation of statutory activities, and not adjust tasks to the needs of donors. In other parts of the Northwestern Federal District,
there is a certain balance between revenues from the production of public and private goods, which suggests the ability of the third sector to distribute resources and
manage them in such a way that ensures the achievement of statutory goals and an
increase in the volume of services provided due to the diversification of its revenues.
Keeping this balance is optimal both for the development of the non-profit sector
in the regions and for building its effective and mutually beneficial cooperation with
other actors, which is a necessary condition for the functioning of society [Dvoryadkina, Prostova, 2019, p. 60]. The fact that the non-profit sector in Russia is developing
under the close scrutiny and control of the state does not exclude the need to look
for ways to interact with other participants in economic activity. Only in this way,
the non-profit sector will be able to maintain independence in the implementation
of its statutory activities and realise its development potential and enjoy freedom of
action. As studies demonstrate, the issue of financial support in many cases is settled
at the expense of the state, the Russian non-profit sector does not yet have sufficient
qualifications to perform such tasks. According to the results of opinion polls, 17â€“22
% of regional NPOs see a lack of qualified personnel as one of the major barriers to
the development of the sector [Ageeva, Novik, 2018; Kosygina, 2020], in 31â€“34 % of
non-profit organisations nobody is involved in fundraising [Kosygina, 2018; Korneeva, 2016]. At the same time, one of the main factors in the formation of the stability
of the third sector is the ability to independently manage their financial and human
resources [Mersiyanova, Ivanova, Korneeva, 2015, p. 157]. This ability belongs to the
2021â€¯â€¢â€¯Vol.â€¯22â€¯â€¢â€¯No.â€‰4 Journal of New Economy 111
Regional Aspects of Economic Growth
basic conditions for the fulfillment of the main mission of organisations of the nonprofit sector â€“ to improve the quality of life of the population.
We should note that the publicness index is only one of the indicators used to determine the social efficiency of NPOs, and the results obtained are primarily about
the strategies of the third sector in relation to the attraction and distribution of financial resources. Assessment of the social efficiency of the non-profit sector as the
degree of achievement of the goals set suggests taking into account many factors,
among which the volume and quality of services provided to the population are of
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Information about the author
Anna S. Artamonova, Jr. Researcher of Vologda Research Center of the Russian Academy of
Sciences, 56a Gorky St., Vologda, 160014, Russia
Phone: +7 (8172) 59-78-32, Ðµ-mail: [email protected]
Â© Artamonova A. S., 2021
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