Working Paper: CEPR ID: DP8498
Authors: Josse Delfgaauw; Robert Dur; Carol Propper; Sarah L. Smith
Abstract: Recent studies have demonstrated the importance of good management for firm performance. Here, we focus on management in not-for-profits (NFPs). We present a model predicting that management quality will be lower in NFPs compared to for-profits (FPs), but that outputs may not be worse if managers are altruistic. Using a tried and tested survey of management practices, we find that NFPs score lower than FPs but also that, while the relationship between management scores and outputs holds for FPs, the same is not true for NFPs. One implication is that management practices that work for FPs may be less effective in driving performance in NFPs.
Keywords: impure altruism; management; not-for-profits
JEL Codes: H8; J24; J45; L33
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| altruistic motivations of NFP managers (D64) | management practices in NFPs (L31) |
| management quality in NFPs (L31) | management quality in FPs (L15) |
| management practices in FPs (J54) | performance outcomes in FPs (L25) |
| management practices in NFPs (L31) | performance outcomes in NFPs (L31) |
| incentives in NFPs (L39) | performance outcomes in NFPs (L31) |
| management scores in NFPs (L31) | performance outcomes in NFPs (L31) |