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Do Donors React to Advertising Spending?

Sat, April 21, 11:15am to 12:30pm, Hyatt Regency Greenville, TBA

Abstract

Drawing on private data of advertising expenditures, we are the first to investigate the effects of advertising spending on nonprofit (NP) hospital performance. We extend the accounting literature on factors affecting performance. Using a sample of 1,632 hospital-year observations, we find that advertising spending is significantly positively related to program ratios, suggesting that indeed performance is improving. Our findings are useful to policy makers, the IRS, and other stakeholders when considering new performance measures for the NP profession.

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