Which Nonprofit Organizations Borrow?

The tax benefit, bankruptcy value, and pecking-order theories of corporate capital structure are discussed in context of nonprofit organizations. A bivariate probit model shows that coefficients differ between models meaning mortgages and tax-exempt bonds are not equivalent forms of debt. Organizations with proportionally more program revenues, contributions, total assets, total revenues, and executive compensation are more likely to have a mortgage. Nonprofits that rely on special event fund-raising or contributions have a lower probability of using bond financing. The use of debt is also influenced by the nature of the organization's mission as measured through the NTEE classification.     

Is Management Performance a Factor in Municipal Bond Credit Ratings? The Case of Texas School Districts

Municipal bond ratings are an important determinant of interest costs that a bond issuer must pay. The three major bond rating firms profess that economic and management factors are considered in assigning a bond rating. The management component is of particular interest to public administrators because they can exert more direct control over management factors. Management factors have not been studied empirically in the literature because management performance is generally difficult to quantify. However, the public education sector has seen advances in performance measures and at the same time has increasingly relied on municipal bonds to finance construction. The ordered probit estimation provides support that management performance, as measured in the districts performance on standardized test scores and success in student college admission rates, does influence Texas school district bond credit ratings.     

State Debt Limits: How Many Are Enough?

There is a growing concern among state policy makers that unrestrained debt may exceed politically acceptable or financially sustainable levels of debt. Many states have established limits to restrict debt, but many of these limits are circumvented through issuing more complex and specialized bonds. In this article, we focus on the use of debt limits as an instrument to manage a state's debt in context of two key questions: (1) under what circumstances should a state consider multiple debt limits and (2) if multiple limits are established, what factors should be considered in setting such multiple limits. In addressing these issues, we consider the theoretical and conceptual issues associated with setting debt limits, we highlight current state debt limit policies, and discuss factors that appear to be influencing decisions to establish and set multiple limits.     

ASSESSMENTS OF RISK AND BEHAVIORAL EXPERIENCE: AN EXPLORATORY STUDY OF CHANGE

This study examines the relationship between assessments of the risk of punishment and self-reported involvement in three illegal behaviors in a sample of college-aged respondents. It is found that those respondents who had not yet committed a particular offense were more likely to perceive a greater certainty of punishment than those with experience in committing the offense. For two of three offenses the effect of becoming involved in offending had a more substantial impact on the perceptions of those respondents with both experience in offending and high perceived certainty of punishment than on those who had experience and less pessimistic estimates of risk Finally, a multivariate analysis of the relationship between behavioral and perceptual change reveals that each variable affects the other even when other sources of change are controlled. The importance of the findings for the deterrence doctrine are discussed.