Risk and charitable organizations: the case of Atlantic Canada

Abstract

Using panel data from 2003-2010 on charitable organizations in Canada we explore the implications that exposure to risk, in various guises, has on organizations' ability to meet their mandate. We run a random effects panel estimation focusing our attention on the case of Atlantic Canada in an effort to explore the idiosyncrasies that make it an interesting case study, and a microcosm of sorts for producing risk metrics in general. A comparative analysis is provided with the Canadian charitable sector as a whole to contrast the results and afford a context for discussion. Results suggest that diversification in revenue streams may in fact increase risk for charitable firms; and comprehensive modeling techniques, which categorize the entire Canadian market quite well, lead to increased noise in estimating exposure to risk for Atlantic Canada firms. The latter seem somewhat more sensitive to exogenous economic changes, when compared to the entire marketplace.