Diffusion of Nonprofit Organizations from an Internal and an External Perspective

Nonprofit organizations are generally considered to be employed in order to achieve goals as they relate to the needs and desires of the local community. Diffusion of nonprofit organizations, on the other hand, can depend on various government conditions, such as the availability of resources. This is because most nonprofit organizations rely on grants from the government. Thus, this study attempts to examine whether nonprofit organizations are more commonly established under favorable government conditions or any other conditions, such as emulation of neighboring counties and other socioeconomic factors. Using a panel data set from 24 counties in Maryland between 2007 and 2012, our analysis demonstrates that nonprofit organizations are more commonly established when social conditions have deteriorated in a county rather than when financial conditions of government are good. This implies that nonprofit organizations have voluntary characteristics.