Sustainability of Asian-American Nonprofit Organizations in U.S. Metropolitan Areas

Abstract

This article examines the factors for the sustainability of Asian-American nonprofits formed in major U.S. metropolitan areas by 2000. Consistent with studies on other nonprofits, the youngest and smallest among Asian-American organizations are the most vulnerable. The age effect is nonlinear and the marginal effect of an additional year of age on sustainability decreases at higher values of age. Chinese-American nonprofits or Asian-American social service nonprofits are more likely to remain active than other Asian ethnic or other functional types of organizations. More sustainable Asian-American nonprofits are better at managing their finances. A growing Asian-American population also provides these nonprofits with more sustaining power. This study contextualizes the importance of organization age and size as central determinants of nonprofit sustainability. It also demonstrates the relevance of race and ethnicity, organizational function, as well as management capacity for future research.

Keywords

Asian American nonprofit sustainability survival immigrant organization

Introduction

Asian-American organizations experienced rapid growth in the last two decades of the 20th century, following the elimination of exclusionary immigration practices in the 1940s and subsequent massive immigration from Asia. From the early discriminatory environment to the more accommodating contemporary context, these organizations performed important cultural, religious, service, and advocacy functions in local communities of Asian immigrants. During the first decade of the 21st century, it is not known if the large number of organizations formed in the 1980s and 1990s has remained viable and whether their sustainability is subject to similar factors affecting mainstream nonprofit organizations. This article examines the sustainability of Asian-American nonprofit organizations in the 10 largest U.S. metropolitan areas in 2000.

Literature Review

Asian-American community organizations existed as early as the turn of the 20th century. Various ethnic organizations were instrumental in representing immigrants’ interests in the earlier political climate of exclusion and discrimination of ethnic minorities (Lien, 2001; Yu, 1992). Substantial immigration and the growth of the welfare state in the second half of the 20th century have created both the demand for and supply of new forms of Asian-American community organizations. Asian-American organizations numbering in the thousands were formed in major metropolitan areas to meet various needs of the growing Asian-American population (Hung, 2005). In particular, this period witnessed the rise of multiservice centers in some Asian-American immigrant communities to provide culturally and linguistically competent as well as accountable social services to a population perceived to be inadequately served by mainstream agencies (Chow, 1999). The privatization of public assistance in recent decades also takes advantage of the local network of ethnic organizations like Indo-Chinese refugee associations to deliver services (Hein, 1997). Some Asian-American community organizations also foster community economy development by soliciting CDBG money (Sirola, Ong, & Fu, 1998) and facilitating wealth creation among the Asian-American middle class (Patraporn, Pfeiffer, & Ong 2010)

Asian-American community organizations are very diverse, reflecting their home country and regional origins. Chinese and Japanese-American organizations are the oldest among Asian-American organizations. They have evolved over time to meet new challenges and needs in their respective community. For instance, the Japanese American Citizens League played an active role in seeking redress for the internment of Japanese Americans during World War II (Kitano & Maki, 2003). Some of its leaders were also instrumental in founding other Asian-American professional organizations like the Asian Pacific American Librarians Association (Yamashita, 2000). Contemporary Chinese language schools and supplementary education programs are complementary to the formal education system, enabling immigrant children to integrate with the mainstream while preserving their cultural heritage (Zhou & Li, 2003).

Many Korean-American churches play multiple roles, from maintaining cultural traditions, seeking services through the pastoral ministry, to acquiring social status for the selected few church leaders (Min, 2000). Southeast-Asian community organizations have been especially instrumental in assisting many Vietnamese, Laotian, and Cambodian immigrants, who face particular socioeconomic and psychological challenges in adapting to life in the United States after resettlement from turmoils in their homeland (Pho, Gerson, & Cowan, 2007; Rumbaut 2000). While Filipino organizations have a longer history in the United States than other Southeast-Asian nonprofits, they are far from being homogeneous due to differences in economic class and homeland regions (Espiritu, 1996). Likewise, South Asian organizations in New York City and Los Angeles were mostly fragmented—so much so that some of them might be rivalries along a home country’s regional, religious, or caste boundaries (Khandelwal, 2002, Kurien, 2001).

In spite of the heterogeneity among Asian-American organizations, there are some unifying forces within the Asian-American community due largely to the rise of U.S.-born second generation Asian Americans. Establishing nonprofit agencies was an important institutionalization process in Pan Asian-American movement (Geron, 2003). Pan Asian-American nonprofits played advocacy roles from addressing injustice inside Asian-American communities and anti-Asian-American sentiments, to promoting Asian-American political representation at multiple levels of government (Lien 2001; Liu, Geron, & Lai, 2008). Another unifying force is the important role acculturation plays in the volunteering for formal organizations among minority and immigrant groups, although factors affecting their volunteer participation are not uniformly the same. For Asian immigrants, other than naturalization and socioeconomic status, their volunteering is less affected by family composition, marital status, age, and gender than other immigrant groups. (Sundeen, Garcia, & Raskoff, 2009).

Cross-organization partnership and collaboration is also prevalent among Asian-American organizations. While most ethnic nonprofits focus on the needs of the first generation immigrants and their families, some second generation Asian Americans see the merits in forming their own organizations and working with both ethnic and mainstream organizations (Dhingra, 2003). Ethnic organizations also formed coalitions based on shared identity like gender or class, especially when they experienced unequal partnership within the Asian-American community (Advani, 1997). With the right leadership, Asian-American community organizations can be the basis for multiethnic coalitions to resolve animosity and conflicts in urban school districts with a diverse student population as in Alhambra, California (Calderon, 1995). In the increasingly global community, some Asian-American organizations take on a transnational focus as well. In recent decades, ethnic transnationalism has become more institutionalized and taken place via nonprofit operation as in the case of some Chinese American nonprofit organizations engaging in different aspects of Sino-American relationship and developments in China (Wheeler, 2004). Likewise, some Hindu organizations promote transnational development of Hindu nationalism in reproducing Hindu culture in the United States. (Mathew & Prashad, 2000; Rajagopal, 2000).

Organizations from businesses to nonprofits rise and fall. Asian-American community organizations may go through similar life cycle changes. Qualitative case studies and quantitative analysis have examined the sustainability and closure of nonprofit organizations. Relating the formation of an organization to its sustainability, Edward and McCarthy (2004) found that while preexisting strong social ties had facilitated the creation of social movement organizations like the local chapters of Mothers Against Drunk Driving, their longer term survival depended on the existence and cultivation of weak ties postformation, as well as broadening the initial focus on helping a limited number of identified drunk driving victims or financial sponsorship. Both quantitative and qualitative data of failed organizations indicated that size and age are key factors for organization termination (Hager, Galaskiewicz, Bielefeld, & Pins, 1996). In a subsequent event history study of a subset of these organizations in the 1996 study, Hager, Galaskiewicz, and Larson (2004) found that the effect of organizational age on nonprofit closure was mitigated negatively by the effect of organizational size, use of volunteers, and donated income but positively by the effect of government funding. The governing board of an organization also played key roles. Thirty years of operation came to an end for a children rehabilitation organization as its leadership failed to adapt to changing external circumstances and join an emerging local coalition of children rehabilitation services 5 years prior to its eventual demise (Norris-Tirrell, 1997).

There is a diversity of experience among organizations using different strategies for social change or focusing on special populations. Minkoff (1993) found that in a sample of 878 national women and minority groups, those taking extreme positions were less viable than groups seeking reform or integration strategies. Groups in the political or legal arena were also less viable than those focusing on service provision and cultural enrichment. In the same study, Asian-American and Hispanic groups had lower failure rates than women or African American groups. Feminist organizations may face particular challenges. Riger (1994) argued that striking a balance between equality in collective decision making and bureaucratization was central to a feminist organization’s survival. Traditional Asian-American community organizations operating primarily on personal and informal premises may face similar challenges in balancing its cultural norms with institutionalized administration. Knusten and Brower (2010) showed that ethnic and immigrant organizations that are able to balance their accountability to both the community they serve and the providers of tangible resources tend to be more viable. Matured ethnic multiservice centers and small cultural organizations (like family associations) without high demand for resources are successful examples. The challenge for new immigrant organizations is to establish the instrumental accountability with funding sources as quickly as possible.

The experience of nonprofits in non-U.S. contexts also provided some confirmatory evidence for the determinants of organization survival. Fernandez (2008) found that among the 41 dissolved Spanish nonprofits studied, higher percentage of the dissolved nonprofits were younger and smaller than active organizations. Spanish nonprofits that received more sociopolitical legitimacy, or having more diversified resource support, tend to last longer. Among immigrant religious congregations in Canada of diverse faith traditions, immigrant volunteering is a function of organizational attributes and processes as much as that of individual factors. An ethnic religious organization’s financial and organizational sustainability on one hand, and its volunteer participation level on the other one are mutually reinforcing (Handy & Greenspan, 2009). Current literature clearly and consistently identifies organizational age and size as key determinants for the survival of nonprofit organizations in general. Type of organization, whether it is a focus on a particular mission or a special population may also matter. This study investigates how well these factors affect the sustainability of Asian-American nonprofit organizations in the U.S. metropolitan areas.

Method and Data

Data for this study are drawn from IRS Form 990, available at both the National Center for Charitable Statistics IRS Business Master Files and the Guidestar web site (www.guidestar.org).¹ Although Form 990 data are incomplete and exclude smaller organizations, they include data on the factors for organizational sustainability identified in the literature. In this study, these factors are Asian-American organization age, size, ethnic identity, functional type, and management capacity. Baseline information is based on Asian-American organizations in existence as of 2000 in the 10 metropolitan areas.² The listing of inactive organizations is verified by the presence of completed Form 990 for 2006 in the Guidestar.org web site. Although not having filed the Form 990 for a year does not necessarily mean organization closure, four consecutive years of not filing Form 990 from 2006 to 2009 can be considered substantial downsizing or inactivity, potentially leading to eventual closure.³ This dependent variable takes on the value of 1 if an organization exists in 2009 and zero if it does not. The earliest date for the absence of Form 990 in the sample is 1997. It is very possible that organizations that had become inactive prior to 1997 are not in the Form 990 online archive. Thus this study examines Asian-American nonprofits that have become inactive from 1997 to 2009.

The literature on organizational survival has highlighted organization age and size as key determinants of an organization’s life cycle. In the current sample, the age of an organization is measured by the number of years of operation from the year of formation to 2009 or its last record of completed Form 990. Organization size is measured by the average of the available annual revenue from 1998 to 2003. The ethnic diversity of Asian-American community organizations may allow for ascertaining if some ethnic organizations are more sustainable than the others. Ethnicity is indicated by the ethnic identity embedded in the organization names of these Asian-American organizations. The literature suggests that mainstream nonprofits engaging in political issues or taking extreme positions on these issues are less viable. The existence of different functional types among Asian-American organizations provides a testing ground to assess if some types are more sustainable than the others. Functional types of these organizations include faith-based, cultural, service, and public interest organizations. The functional type of an organization may be identified from its mission and activities. Faith-based organizations here refer to primarily organizations affiliated with different religious groups but they are not places of worship. Cultural organizations primarily focus on promoting the home country’s language and arts—for instance, language schools, traditional dance, or opera groups. Service organizations provide various social services that facilitate especially immigrant Asian Americans’ integration into the economic life of the larger society. Public interest organizations include both professional organizations defined as membership organizations of defined trades or occupation, and advocacy organizations that strive to advance or protect certain rights on behalf of Asian Americans or subethnic groups.

Descriptive Data

There were more than 2000 Asian-American nonprofit community organizations in the 10 largest metropolitan areas as of 2000 (Hung, 2007). In 2000, 60.6% of the country’s Asian Americans resided in these 10 metropolitan areas.⁴ The sustainability status of about 600 of these organizations can be verified with IRS record of completed Form 990. A very large number of Asian-American organizations are either places of worship or too small for the purpose of filing Form 990. The 600 Asian-American organizations are the largest and most organized among their peers. Their sustainability is likely to have greater impact on the local communities than their smaller peers, whether they have registered with IRS or not. The following discussion is thus limited to the most administratively and financially organized Asian-American nonprofits in these metropolitan areas serving more than half of the Asian-American population in the United States.

Tables 1 to 5 summarize the descriptive data of the sample. A majority (83%) of the most organized Asian-American nonprofits formed in different periods are still active in 2009. Seventy-seven percent of these organizations formed and registered with IRS since 1981 and more than 92% of those before 1980 are still active. However, more than half (53%) of the newest organizations 10 years or younger has become inactive. Since organizations becoming inactive prior to 1997 are not in the database, these are upper bound estimates of active Asian-American nonprofits from different periods. A much higher percentage (95%) of the larger Asian-American organizations, as measured by average revenue in excess of $200,000, are active than the smaller ones (76%). This sample of 592 organizations has median annual revenue of just over $100,000 and an average of just under $750,000, hardly sizable in comparison with non-Asian-American organizations. A significant majority of Asian-American service organizations (90%) are still active in 2009, followed by cultural (81%), public interest (78%), and faith-based (74%) organizations in that order. Regarding the status of Asian-American organizations by ethnicity, 80% or more of these ethnic organizations are still active except for Southeast-Asian organizations (75%). Southeast-Asian nonprofits here include Cambodian, Filipino, Hmong, and Vietnamese-American organizations. Among the 10 metropolitan areas, the two southern metropolitan areas of Dallas and Houston have the highest percentage of active organizations (95%-100%). New York and Chicago have the next highest percentage at about 90%. At least two thirds of Asian-American nonprofits in the other metropolitan areas remain active.

Table 1.

Status of Asian-American NPOs in 2009 by Years of Operation

	AA NPO status in 2009
years of operation	% inactive	% active	N
0-10 years	53.4%	46.6%	103
11-20 years	11.0%	89.0%	255
21-30 years	8.7%	91.3%	138
31+ years	6.3%	93.8%	96
All AA NPOs	17.1%	82.9%	592

Table 2.

Status of Asian-American NPOs in 2009 by Revenue Size

	AA NPO status in 2009
revenue groups in 2000	% inactive	% active	N
Less than US$50,000	30.1%	69.9%	193
US$50,001-US$200,000	16.9%	83.1%	189
US$ 200,001-US$500,000	5.2%	94.8%	96
US$500,000 +	5.3%	94.7%	114
All AA NPOs	17.1%	82.9%	592

Table 3.

Status of Asian-American NPOs in 2009 by Functional Types

	AA NPO status in 2009
functional types	% inactive	% active	N
Public interest NPO	21.7%	78.3%	106
Cultural NPO	18.7%	81.3%	257
Service NPO	10.0%	90.0%	190
Religious NPO	26.3%	73.7%	38
All AA NPOs	16.9%	83.1%	591

Table 4.

Status of Asian-American NPOs in 2009 by Ethnicity

	AA NPO status in 2009
AA NPO ethnicity	% inactive	% active	N
Chinese-American NPO	13.9%	86.1%	202
Japanese-American NPO	11.8%	88.2%	68
Korean-American NPO	20.2%	79.8%	99
South-Asian-American NPO	19.5%	80.5%	41
Southeast-Asian-American NPO	25.5%	74.5%	55
Pan Asian-American NPO	18.1%	81.9%	127
All AA NPOs	17.1%	82.9%	592

Table 5.

Status of Asian American NPOs in 2009 by Metropolitan Area

	AA NPO status in 2009
SMSA	% inactive	% active	N
New York	10.9%	89.1%	119
Los Angeles	21.8%	78.2%	165
Chicago	10%	90%	40
District of Columbia	24.6%	75.4%	69
San Francisco	18.4%	81.6%	104
Philadelphia	22.2%	77.8%	18
Boston	20.8%	79.2%	24
Detroit	18.2%	81.8%	11
Dallas	4.5%	95.5%	22
Houston	0%	100%	20
All AA NPOs	17.1%	82.9%	592

Regression Results

To ascertain the independent effects of the contextual and organization attributes on the sustainability of Asian-American nonprofits, binary logistic regressions were conducted and the results are shown in Tables 6 and 7. Contextual variables measure Asian-American demographic profile in each metropolitan area. Agency attributes include organization age, size, ethnicity, functional type, and management capacity. Table 6 summarizes the results for the overall Asian-American nonprofits in the 10 metropolitan areas. Table 7 breaks down the results by ethnic nonprofits. In Table 6, all regression models use the same organization age indicators and size, which is measured by the average annual revenue for 3 consecutive years in 1998-2003. They differ in the measures of Asian-American demographic profile, ethnicity, and functional type variables. Regression 5 is the full model with operational efficiency and institutionalization as measures of management capacity.

Table 6.

Regression Results on Asian-American NPO Sustainability as a Group

	(1)		(2)		(3)		(4)		(5)
	B	Sig.	B	Sig.	B	Sig.	B	Sig.	B	Sig.
Asian-American population 2000^a	.000	.226	.000	.112	.000	.125	.000	.492	.000	.684
Asian-American population change 2000-2009^a	.038	.111	0.040**	.085	.019	.442	0.053**	.032	.049	.311
Asian-American per capita income change 2000-2009^a			−5.324**	.043
Asian-American Poverty Rate Change 2000-2009^a					1.886*	.081			−.878	.685
District of Columbia metropolitan area							−0.873**	.043	−.576	.580
NPO age	0.279***	.000	0.263***	.000	0.263***	.000	0.272***	.000	0.280***	.000
Squared NPO age	−0.396***	.000	−0.377***	.000	−0.377***	.000	−0.391***	.000	−0.376***	.000
NPO annual revenue less than $50K		.004		.004		.004		.003
NPO annual revenue $500K +	1.039**	.055	1.095**	.039	1.112**	.036	1.106**	.037	.775	.212
NPO annual revenue $200-$500K	1.835***	.001	1.777***	.002	1.750***	.002	1.859***	.001	1.624**	.014
NPO annual revenue $50-$200K	0.524**	.067	0.497*	.078	0.498*	.078	0.510*	.073	.251	.573
Social Service NPO			0.821**	.011	0.832***	.010			1.007**	.028
Public Interest NPO	−.584	.164					−.472	.246
Cultural NPO	−0.956***	.007					−0.913***	.009
Religious NPO	−1.384***	.009					−1.361***	.010
Chinese-American NPO			0.485*	.096	0.490*	.093	0.517*	.079	.224	.581
Japanese-American NPO	−.704	.168
Korean-American NPO	−.557	.162
South-Asian-American NPO	−.076	.883
South-Asian-American NPO	−0.853*	.064
Pan Asian-American NPO	−.328	.390
NPO total margin									1.824**	.016
Percentage of NPO expense on management									.051	.951
Constant	−2.148	.015	−1.449	.247	−3.114	.000	−2.670	.003	−3.644	.004
N	592		588		592		592		370
R-Squared	0.353		0.352		0.35		0.357		0.354

2000 and 2009 U.S. Census Bureau urban area population data in a metropolitan area. CMSA data is not available for 2011 census.

significant at p < .10 level. **significant at p < .05 level. ***significant at p < .01 level.

Table 7.

Regression Results on Asian American NPO Sustainability by Ethnicity

	Chinese-American NPOs		Japanese-American NPOs		Korean- American NPOs		South-Asian-American NPOs		Southeast-Asian-American NPOs		Pan Asian-American NPOs
	B	Sig.	B	Sig.	B	Sig.	B	Sig.	B	Sig.	B	Sig.
Asian ethnic population in 2000 in a metropolitan area^a	0.000	.837	.000	.476	.000	.577	.000	.351	.000	.515	0.000***	.035
2000-2010 Change in Asian ethnic population in a metropolitan area^a	0.043	.312	.181	.162	−.003	.950	−.055	.285	−.071	.143	0.121**	.017
Age of organization	0.235***	.000	−.033	.855	0.640***	.000	0.954**	.033	0.701**	.037	0.477**	.000
Age squared	−0.306***	.000	.273	.456	−1.306***	.003	−1.859*	.077	−1.906**	.043	−0.636**	.014
Organization size
Less than $50K		.171		.662		.123		.983		.996		.946
$500K +	1.193	.214	19.216	.998	−1.424	.285	19.898	.999	20.634	.999	.771	.555
$200-$500K	1.456**	.081	19.759	.998	1.920	.134	.636	.782	20.088	.999	18.836	.998
$50-$200K	0.820	.105	1.262	.208	1.140	.135	−.554	.758	−.215	.811	.003	.997
Social service NPO	0.364	.606	19.375	.998	.743	.286	2.498	.213	1.310	.180	1.528	.123
Constant	−3.228	.137	1.186	.614	−4.666	.045	−1.985	.632	−1.787	.631	−11.307	.003
N	202		66		99		41		54		126
R-Squared	0.279		0.477		0.461		0.667		0.549		.635

2000 and 2010 U.S. Census Bureau population data for counties within a metropolitan area. Southeast Asians here include Vietnamese and Filipinos only. CMSA data is not available for 2011 census.

significant at p < .10 level. **significant at p < .05 level. ***significant at p < .01 level.

Consistent with current literature on nonprofit survival, organization age and size are the predominant factors in all models—the youngest and the smallest organizations with minimal revenue are the least likely to remain active. While older organizations are more likely to be sustainable than newer ones, the age squared negative estimates suggest that the marginal effect of an additional year of age on sustainability decreases at higher values of age. There may indeed be a life cycle for these Asian-American organizations. Organizations at different stages of life cycle may be confronted with various types of challenges. The newest organizations strive to reach sufficient scale and recognition. Their survival odds improve as they gain more experience over time, become more organizationally efficient, and develop better relationship with funders and clients. Much older organizations, having fulfilled their original missions, may struggle to adapt to the changing demographic and needs in more recent times, and have difficulties in making generational transition within the leadership. Statistically, the inflection point is where on the average the negative factors of declining usefulness starts to outweigh the positive factors of increasing experience. For this sample of Asian-American nonprofits, the inflection points⁵ range from 35 years in Models 1 to 5 to 37 years in Model 5 (Table 6). The combined organization age and age squared effects are the most robust results in this study. Table 7 breaks down the analysis further by ethnic nonprofits. In all but the Japanese-American nonprofit regressions, both the organization age and age squared variables have the same effects as in the regressions for the overall Asian-American nonprofits. No other independent variable shows similarly consistent and significant impact. This life cycle result cautions Asian-American organizations not to be complacent with a history of success, but, instead, to be continuously strategic in assessing its missions and meeting the changing needs of their relevant community.

For the organization size variable, as measured by average annual revenue in 1998-2003, the categorical estimates show that larger Asian-American nonprofits have more sustaining power than the smallest organizations with less than $50,000 annual revenue. The most optimal size appears to be at the revenue level between $200,000 and $500,000 as the estimates for the organization size above and below this range are not statistically significant in the full model (5). The organization size effect is largely absent in the ethnic nonprofit regressions, except for Chinese-American nonprofits (Table 7). Even though successively higher levels of revenue may not ensure organizational viability, it is clear that the smallest Asian-American nonprofits need to strive toward the $200,000 to $500,000 range to enhance their sustainability.

The results for the functional type estimates are inconclusive regarding the higher failure rate of advocacy groups found in the literature. The public interest groups in this sample include advocacy groups, professional organizations, private foundations, media agencies, and a few others. The sustainability of these public interest groups relative to other organization types, individually and collectively, is ambiguous in the sample. The strongest evidence pertains to service organizations. Asian-American service organizations are more likely to be active than other types of Asian-American nonprofits collectively, and especially in relation to cultural or faith-based organizations.

The ethnicity of Asian-American nonprofits does not matter in the full model (5) in Table 6. In other regression models, Chinese-American nonprofits are more sustainable than their Asian-American ethnic counterparts as a group, and Southeast-Asian nonprofits in particular. While the estimates for the individual Asian ethnic nonprofits relative to Chinese-American nonprofits are negative, only the Southeast-Asian estimate is statistically significant (Table 6, Model 1). Practically all Asian-American ethnic nonprofits are subject to the life cycle effect of age and age squared (Table 7). Due to the history of immigration and population size, Chinese-American nonprofits are two to five times the number of other Asian ethnic nonprofits in this study. An active nonprofit becoming inactive is an uncommon development. This quantitative difference may partly explain the higher level of sustainability of Chinese-American nonprofits. In addition, the larger Chinese American population relative to other Asian-American ethnic groups may provide a more extensive internal network and more resources to sustain an ethnic nonprofit. U. S. Census data have indicated the bimodal distribution of the socioeconomic profile of Asian Americans (Lo, 2009). The model minority stereotype does not apply to all Asian Americans. Further research may assess if similar circumstances result in the divergence of experience at both the individual and organizational levels among some Asian-American population groups.

It can be argued that a nonprofit with more paid staff to carry out the regular functions of the organization may be more sustainable. Personnel cost is a significant component of a nonprofit organization’s budget. The percentage of total expense devoted to management may be used as a measure of how institutionalized a nonprofit organization is. For the sample of Asian-American nonprofits in this study, however, this measure of institutionalization has no clear impact on sustainability (Table 6, Model 5). This study examines only organizations that have been formally organized, which is the most significant step of institutionalization. The effect of formal organization, as measured by registration with the Internal Revenue Service, on sustainability merits future research. The management capacity that matters in the current study is the agency’s tatal margin, defined as the ratio of the excess of revenue over expense to total revenue. Asian-American nonprofits with higher operating margin are more likely to be active than those operating at lower margins. Higher total margin reflects not only a nonprofit’s operational efficiency but also its ability to build up reserves to withstand future unforeseen fiscal stress down the road.⁶

Table 6 also shows the effect of some contextual factors on Asian-American nonprofit sustainability. Controlling for the Asian-American population size in these metropolitan areas in 2000, there is some evidence that a growing Asian-American population has positive impact on the sustainability of these Asian-American nonprofits. Organizations in metropolitan areas with more rapid growth in Asian Americans are more likely to remain active than those in areas with slower population growth (Models 2 and 4). But the growth of specific ethnic population does not have similarly clear impact, except for Pan Asian-American nonprofits (Table 7). Changes in the socioeconomic profile also matter. Asian-American nonprofits in areas with slower per capita Asian-American income growth (Model 2) or deteriorating Asian-American poverty rate in the 2000s (Model 3) are more likely to remain active than those in areas where Asian Americans experience improving economic conditions.

Faster population growth creates both the demand for Asian-American nonprofits and the supply of financial and human resources to start and maintain these organizations. The slower growth in Asian-American per capita income may result in shortfalls in financial contribution to Asian-American nonprofits and negatively affect organizational sustainability. It may also intensify the demand for income-based services to this population. So the net effects may be offsetting. The statistically significant estimate for this coefficient suggests that the positive demand effect on sustainability may be empirically stronger than the negative supply effect. That the growth of overall Asian-American population is more relevant than that of individual ethnic population highlights the possibility of interethnic coordination and cooperation to enhance sustainability. This result reinforces a premise of the Pan Asian-American movement, that is, the shared fate among different Asian-American ethnic groups (Okamoto, 2003). The strength of the positive demand effect is also reinforced by the similar effect of worsening Asian-American poverty rates in the same period (Table 6, Model 3). In the midst of growing demand for Asian-American nonprofits, adequate resources must be available to meet the demand and foster organizational sustainability. Independent variables based on the aggregate sources of revenue information in Form 990 so far have not shown any clear impact on sustainability. An investigation of the revenue stream of these organizations in the 2000s may shed light on how and where they mobilize financial and human resources in this decade of dwindling public and private funding. This is fruitful ground for future research. After controlling for the demographic and socioeconomic difference among the Asian-American population in the metropolitan areas, Asian-American nonprofits in the District of Columbia appear to be less sustainable than their counterparts in the other nine metropolitan areas.

Concluding Remarks

This study is the first detailed quantitative modeling of sustainability among Asian-American organizations, taking advantage of publicly available data. In one setting, it combines the contextual and organizational factors for the sustainability of Asian-American nonprofits in major U.S. metropolitan areas serving more than half of the Asian-American population in the country. While there are some observed differences in sustainability by ethnic identity and functional type, the multivariate analysis finds that Asian-American nonprofit sustainability is primarily the product of systematic variations in organization age and revenue size, the same direct factors for the survival of other nonprofit organizations.

The results of this study also provide directions for future research. The life cycle effects are particularly robust, and applicable to most Asian-American ethnic nonprofits. Once younger organizations reach some degree of stability, their sustainability is not ensured. Future research may examine if some older organizations become inactive because the original missions have been accomplished, the circumstances giving rise the demand for their existence has changed, more mainstream organizations serving similar functions have become more accessible to Asian Americans and other minority and immigrant groups, or some other reasons. The lessons of some long-standing Asian-American ethnic nonprofits in meeting the changing needs of the immigrant population also merit future research. Similarly, smaller Asian-American nonprofits are the most vulnerable. This is especially true for Asian-American organizations with limited local resources and lacking expertise in securing public and other funding to have greater impact beyond small and personal social groups. Due to data availability and Form 990 filing requirements, unregistered informal groups, the smallest registered organizations, and registered organizations that ceased to exist before 1997, are not included in this study. Future studies may examine the sustainability of informal groups and the smallest registered organizations versus the registered ones in this study, as the data become more readily available. Alternative or complementary measures of organization size and management capacity may also be contemplated, including nonfinancial indicators. It is significant that Asian-American social service nonprofits are relatively more sustainable because their clients are likely to be recent immigrants of lower income. More sustainable Asian-American social service organizations provide a stable and culturally competent safety net for these low income households in making transition to the mainstream. The lack of clarity for the impact of public interest organizations may be due to the inclusion of a multitude of different types of organization in this category. The number of cases does not allow for more detailed refinement within this category. Future analysis of a much larger database may provide clearer insight into the sustainability of organizations within this general category, including advocacy groups. This study finds some ethnic difference among Asian-American nonprofits. Future research may also examine the sustainability of other nonprofits serving primarily immigrant groups like Hispanic-Latino nonprofit organizations.

Footnotes

Declaration of Conflicting Interests

The author(s) declared no potential conflicts of interest with respect to the research, authorship, and/or publication of this article.

Funding

The author(s) received no financial support for the research, authorship, and/or publication of this article.

Notes

Bios

Chi-kan Richard Hung teaches at the College of Public and Community Service, University of Massachusetts Boston. He received his PhD in Public Policy from Indiana University, Bloomington. His research interests include immigrant community organizations and community economic development.

Paul Ong is a professor at UCLA’s Asian American Studies Department and Luskin School of Public Affairs. He received his doctorate in economics from U.C. Berkeley. His research focuses on urban spatial inequality, and he is currently studying housing foreclosures and organizational responses to the housing crisis.

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