Examining Cost Structures for Single-Service, Nonprofit Organizations in NYC

Arbor Brothers is a grantmaking organization that provides financial support and consulting services to organizations in their early stages of implementation. Arbor Brothers enlisted a Capstone team to research the existence of economies of scale in the nonprofit sector, with the aim of determining whether nonprofit organizations can expect the cost of their outputs to decrease as their size increases. Through surveys, online data collection, and interviews with key stakeholders, the team examined whether evidence of economies of scale can be found in the changing costs of nonprofit organizations providing a single service in NYC over time. The team produced a final report that shows little evidence of economies of scale at work in the organizations examined. Arbor Brothers plans to share the team’s report with its clients.