Originally published in Nonprofit Quarterly, May 7, 2008

Does a diversified revenue base make for a more profitable-and therefore sustainable nonprofit? Does government funding create big financial problems? Does owning a facility improve an organization's financial health? Nonprofit Finance Fund analyzed IRS Form 990s from 1,085 youth-serving organizations in five states with annual expenses of greater than $1 million. It found that the conventional wisdom may lead organizations and funders to make strategic errors that undermine organizational effectiveness for decades.