A Bivariate Probit Examination of Financial and Volunteer Problems of Non-Profit Sport Clubs

Abstract

Previous research has examined the financial and volunteer problems of non-profit sport clubs in an isolated manner and has neglected the influence that sponsorship and subsidy funding, which we term as external funding, may have on both problems. The purpose of this study is to examine the effect of this external funding on financial and volunteer problems, and the relationship between both types of problems. Using data from a survey of sport clubs in Germany, a bivariate probit model is estimated. The results provide evidence that both problems are interrelated. Clubs relying on sponsorship income experience larger financial and volunteer problems, while subsidies only increase volunteer problems. Moreover, club philosophy variables significantly impact both types of problems while governance structure does not. Internal revenues and miscellaneous external revenues have no significant impact on either type of problem. The findings have implications for club management.