At the same time that higher education was trying to balance their internal budgets, they began to feel influences regarding accountability to external sources. Community colleges have been forced to try to "do more with less" by cutting costs, boosting their productivity, and improving the quality of their services. Through various studies, it has been found that both organizational behaviors and specific organizational attributes (the existence of equitable administrative policies, decision making practices, etc.) have an impact on student persistence. Yet, even with the existence of empirical evidence to support the relationship between particular organizational attributes and student persistence, it is unclear as to exactly which attributes may have the greatest impact;This study was framed around the goals of trying to determine a relationship between institutional characteristics and retention rates at public 2-year institutions. The specific purpose of this study was to understand the relationship between the public 2-year educational institutions' institutional characteristics and first-year retention rates within the framework of the resource dependence theory and the conceptual framework of the organizational nature of student persistence. It was the intended goal of this study to obtain an understanding of how an institution's characteristics and revenue and expenditure structures/patterns impact student retention rates in an effort to assist organizations in their configuration of resources to improve these rates;Since there has been significantly more research that addresses how student characteristics impact retention rates than how institutional characteristics impact these rates, a study of the relationship between institutional characteristics and retention rates of public 2-year educational institutions could have many implications for research. First, understanding these relationships can help institutions evaluate their financial strategies to improve student outcomes. Second, the results of this study may serve as evidence to support institutional efforts in obtaining certain forms of revenue that could benefit student performance. The further importance of this study would be the positive impacts to the students and the community as a result of students achieving greater educational attainment. Finally, this study should contribute to the general knowledge and research in higher education and student outcomes.