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The Investment Returns of Nonprofit Organizations, Part II
Author(s) -
Heutel Garth,
Zeckhauser Richard
Publication year - 2014
Publication title -
nonprofit management and leadership
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.844
H-Index - 54
eISSN - 1542-7854
pISSN - 1048-6682
DOI - 10.1002/nml.21101
Subject(s) - intuition , pension , rate of return , investment (military) , business , investment performance , finance , economics , labour economics , demographic economics , actuarial science , return on investment , microeconomics , political science , psychology , production (economics) , politics , law , cognitive science
We continue our examination of the investment performance of nonprofit charities and foundations. This analysis tests hypotheses about what types of organizations do better. Our motivating intuition is that nonprofits with greater focus on investment performance will secure higher returns. Our hypotheses are tested by regressing the rate of return for each organization on various characteristics. As expected, nonprofits whose primary business is predominantly financial, such as insurance providers and pension or retirement funds, consistently earn higher returns. The data also support our hypotheses that larger nonprofits, older nonprofits, and private foundations will tend to outperform. The evidence is mixed as to whether nonprofits that pay higher executive salaries or spend more on management earn higher returns.