The Impact of Revenue Diversification on Nonprofit Financial Health: A Meta-analysis

Chia Ko Hung, Mark Hager

Research output: Contribution to journalArticlepeer-review

74 Scopus citations


This study reviews the influence of revenue stream diversification on financial health. It is a meta-analysis of previous studies that have studied the relationship. This literature variously demonstrates that nonprofit financial health is improved, not influenced or harmed by diversifying reliance on different revenue streams. Our analysis of 40 original studies reporting 296 statistical effects demonstrates a small, positive, yet statistically significant association between revenue diversification and nonprofit financial health. In addition, we show that granularity of measurement of revenue diversification influences effect size, that this effect has shifted over time, and that studies on U.S. nonprofits demonstrate weaker (or more negative) effects. However, few other prominent suspects, including diversity of financial health measure or methodology choices, explain variations in effects across the literature on revenue diversification. Overall, the study supports the contention that both analysts and practitioners should make strategic considerations that have generally escaped scholarship on revenue diversification or shift attention to revenue optimization considerations that have been raised by portfolio theory.

Original languageEnglish (US)
Pages (from-to)5-27
Number of pages23
JournalNonprofit and Voluntary Sector Quarterly
Issue number1
StatePublished - Feb 1 2019


  • meta-analysis
  • modern portfolio theory
  • nonprofit financial health
  • revenue diversification

ASJC Scopus subject areas

  • Social Sciences (miscellaneous)


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