Controlling for Corporate Governance in Nonprofit Research

Posted: 8 Aug 2019

See all articles by Colleen M. Boland

Colleen M. Boland

University of Wisconsin - Milwaukee - Sheldon B. Lubar School of Business

Erica Harris

Villanova University

Christine Petrovits

College of William and Mary - Mason School of Business

Michelle Yetman

University of California, Davis - Graduate School of Management

Date Written: April 24, 2019

Abstract

Using a large sample of nonprofit organizations in the United States reporting governance information on their IRS Forms 990 from 2008 to 2012, we develop and evaluate several different composite measures of nonprofit governance. These measures can be used to control for governance broadly in a variety of settings, including research that examines nonprofit funding, reporting quality, and executive compensation. Our results suggest that relatively basic indices perform as well as, and in some cases better than, more complex indices. In fact, when controlling for governance in the standard donations model, the collective evidence indicates that an index computed using the simple sum of five binary indicators (audit committee, majority independent board, no outsourcing, CEO salary review, and information available on website) performs best.

Keywords: nonprofit, corporate governance, donations, IRS Form 990, governance index

Suggested Citation

Boland, Colleen M. and Harris, Erica and Petrovits, Christine and Yetman, Michelle, Controlling for Corporate Governance in Nonprofit Research (April 24, 2019). Available at SSRN: https://ssrn.com/abstract=3432712

Colleen M. Boland (Contact Author)

University of Wisconsin - Milwaukee - Sheldon B. Lubar School of Business ( email )

P.O. Box 742
3202 N. Maryland Ave.
Milwaukee, WI 53201-0742
United States

Erica Harris

Villanova University ( email )

Villanova, PA 19085
United States

Christine Petrovits

College of William and Mary - Mason School of Business ( email )

P.O. Box 8795
Williamsburg, VA 23187-8795
United States

Michelle Yetman

University of California, Davis - Graduate School of Management ( email )

128 AOB IV
One Shields Avenue
Davis, CA 95616
United States
530-754-7808 (Phone)
530-752-2924 (Fax)

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