NONPROFIT FINANCIAL VULNERABILITY: A TEST OF THE TUCKMAN-CHANG MODEL USING THE GREAT RECESSION

Abstract

ABSTRACT In 1991, Tuckman and Chang published the seminal work on the financial vulnerability of nonprofit organizations and presented a model that describes financially vulnerable non-profit organizations. Subsequent studies utilizing this model indicate that the model is predictive; however, those studies did not utilize an actual financial shock. Using binary logistic regression, this study tests the predictive ability of the Tuckman-Chang model by applying it to charitable organizations that survived and did not survive the Great Recession of 2007-09. Results of the testing indicate that the Tuckman-Chang model can be used to accurately predict if a charitable organization can survive a financial shock. Keywords charitable organizations, non-profit organizations, not-for-profit, financial vulnerability, Great Recession