Customer targeting and nonprofit revenue capacity: Considering constituents and their compositions in art and culture nonprofit organizations

Constituents can develop the delivery of their program services and empower their individuals and leaders, as well as improve nonprofit sustainability and success. Because studies on the association between constituencies and revenue capacity in nonprofit organizations have yielded mixed findings, this study empirically analyzes how the size and composition of constituencies affect the revenue of nonprofit organizations. Employing a panel dataset of arts and culture nonprofit organizations, this study reveals that its revenue capacity and program service revenue are likely to decrease when a nonprofit organization has assigned multiple constituencies. Furthermore, its revenue capacity and program service revenue decrease when a constituency on ethnicity has been assigned, while the two revenues become greater in the nonprofit organizations that are assigned to age constituencies. This study implies that decision-makers and practitioners in nonprofit organizations should consider the size and composition of their constituencies to ensure sustainable financial health.