1 The Use and Consequences of Perquisites in Nonprofit Organizations

• In Event: Governmental/Not-For-Profit 1

Abstract

Using a diverse sample of over forty-four thousand nonprofit year observations, we find that perks are used in approximately 40 (37) percent of nonprofits (nonprofit-year observations). We find that perks are more likely to be used in larger nonprofits with poor governance, and less likely to be used at organizations with an independent board and those that are charitable in nature. In aggregate we find that perk disclosure has no impact on future donations. However, when we look more closely at the types of perks disclosed, we find that perks which could be construed as likely to enhance the managers’ fundraising ability are associated with higher future donations; while those that are not are associated with lower future donations.

Authors

• Steven Balsam, Temple University

• Erica Harris, Villanova University