Evaluating Factors Affecting the Occurrence of Mission Drift in Third-sector Organizations

Mission drift has been identified as a key challenge in third-sector organizations. However, mission drift is a concept that is often used yet rarely analyzed in third-sector literature. Using the resource dependence theory, the study derives models on how three major revenues and a diversity of revenue sources affect the occurrence of mission drift in third-sector organizations. In the proposed model, the occurrence of mission drift is considered as a dependent variable. Meanwhile other factors including private contributions, government funding, commercial activities, or the Herfindahl-Hirschman Index (HHI) are explanatory variables. The data used are from the nationwide survey on third-sector organizations implemented by the Research Institute of Economy, Trade and Industry (RIETI) in 2017. The results of using the ordered probit model and probit model indicate the following relationships: (a) Private contributions have a negative effect on the occurrence of mission drift; (b) Commercial activities have a positive effect on the occurrence of mission drift; (c) HHI has a positive effect on the occurrence of mission drift. Moreover, the positive effects of government funding are not observed.