Polish and Silesian Non-Profit Organizations Liquidity Strategies

TL;DR

This paper examines how Silesian non-profit organizations manage liquidity strategies, highlighting their tendency towards more aggressive solutions compared to for-profit firms, and discusses the impact of risk decisions on organizational outcomes.

Contribution

It introduces a comparative analysis of liquidity strategies between non-profit and for-profit organizations, based on empirical data from over 450 Silesian nonprofits.

Findings

Non-profit organizations tend to adopt more aggressive liquidity strategies.

Risk management decisions significantly influence organizational financial outcomes.

Empirical data supports the theoretical model of liquidity strategy choices.

Abstract

The kind of realized mission inflows the sensitivity to risk. Among other factors, the risk results from decision about liquid assets investment level and liquid assets financing. The higher the risk exposure, the higher the level of liquid assets. If the specific risk exposure is smaller, the more aggressive could be the net liquid assets strategy. The organization choosing between various solutions in liquid assets needs to decide what level of risk is acceptable for her owners (or donors) and / or capital suppliers. The paper shows how, in authors opinion, decisions, about liquid assets management strategy inflow the risk of the organizations and its economical results during realization of main mission. Comparison of theoretical model with empirical data for over 450 Silesian nonprofit organization results suggests that nonprofit organization managing teams choose more risky aggressive liquid assets solutions than for-profit firms.