Life, Death, and Zombies: Revisiting Traditional Concepts of Nonprofit Demise

Abstract

There is a robust literature examining financial vulnerability and demise of nonprofit organizations, particularly in the United States. However, much of this knowledge stems from inconsistent definitions of nonprofit demise. Using eight comparative case studies, this study revisits traditional definitions of nonprofit life and death to better reflect actual organizational operating status. Following this reclassification, findings from this study show that certain internal and external characteristics are more important in determining a nonprofit’s operational status. In particular, nonprofits whose missions involve a particular regulation are more likely to close due to mission completion or obsolescence; however, these nonprofits also tend to either reincarnate or expand scope if other factors are favorable. The findings also appear to show that the existence of conflict or competition with an outside entity boosts nonprofit cohesion. Internal tensions, however, are particularly harmful.