Weisbrod is undertaking a series of related projects that should contribute to both theory and measurement of nonprofit behavior. He hopes to develop generalizations about the similarities and differences in the behavior of nonprofits, government organizations, and private firms in industries in which they coexist‹such as colleges, hospitals, and day care centers. The studies will focus on incentive structures of executive compensation, factors determining charitable donations, provision of collective goods, tax accounting procedures as they relate to nonprofit organization taxable business activities, and conversions of nonprofits to for-profit status.
The funding will also underwrite a series of interdisciplinary research seminars that Weisbrod plans to organize next year on "Comparative Institutional Behavior and the Non-profit Sector." The sessions will bring together faculty and graduate students from various universities to advance research and increase interest in issues related to nonprofits. His goal is "to create an exciting regional community of scholars" that can meet periodically to share their work.
Much of the proposed research for the Mellon grant was stimulated by findings in Weisbrod's recent book, To Profit or Not to Profit: The Commercial Transformation of the Nonprofit Sector (Cambridge University Press, 1998). The collaborative work explores the changing relationships among nonprofits, private firms, and government agencies, and the implications for public policy toward nonprofits.
Among the projects underway:
Compensation Patterns of Top Management in Nonprofit, For-Profit and Governmental Organizations. Weisbrod has reanalyzed and confirmed his earlier findings that nonprofit hospital chief executive and chief operating officers receive greater base salaries but far smaller performance-based bonuses than their for-profit counterparts; he also found this pattern does not hold true for other managers such as chief financial officers. He will compare this 1992 data to 1996 or 1997 data to see whether these differentials have changed, perhaps narrowed, over time in response to competitive pressures. He is also in the process of acquiring Chicago-area data on autopsies to learn the extent to which nonprofit and for-profit hospitals differ in their provision of this socially desirable vs. privately unprofitable service.
Determinants of Charitable Donations. This study, examining IRS Form-990 data, is concerned with the complex ways that donations to specific nonprofit organizations are affected, directly and indirectly, by fundraising and the crowding-out effects of revenue from commercial activity and government grants.
Provision of Collective Goods. Weisbrod is analyzing data for more than 1,000 California hospitals over nearly 15 years to discover any systematic differences between for-profit, nonprofit, and public hospitals, as well as church-related vs. other nonprofits, in their expenditures for research, educational activities, and charity care.
The Causes and Consequences of Mission-Vagueness. The mission of many nonprofit organizations is far from clear, which makes it difficult for researchers to identify an objective function against which to measure performance. Weisbrod is exploring the consequences of this fuzziness which, he hypothesizes, may increase the discretionary authority of the nonprofit CEO relative to that of private firms.
Future of the For-Profit Sector in Higher Education. Weisbrod will test his hypothesis that long-term processes are underway that may change the traditional revenue structure of higher education and, indeed, the organizational structure of the industry. He foresees for-profit institutions taking on a larger role in providing undergraduate education, and increasing competitive pressure on public, and particularly on nonprofit, colleges and universities. One consequence may be the unbundling of potentially profitable teaching activities from unprofitable scholarly research‹a process analogous to changes occurring in the hospital industry.
Mission-Related and Unrelated Revenue-Generating Activities. Weisbrod will analyze data from a sample of nonprofits' tax returns to understand how nonprofits generate funds through the interplay of their taxable ("unrelated") and nontaxable ("related") activities.
Consumer Choice. Using state-level data from Wisconsin, this study, with IPR graduate fellow Jeff Ballou, is analyzing consumer choice between for-profit and nonprofit nursing homes.
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