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Using a large sample of nonprofit organizations in the United States reporting governance information on their IRS Forms 990, 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.

Controlling for Corporate Governance in Nonprofit Research