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.
# 11-094/1 (2011-07-15)
- Josse Delfgaauw, Erasmus University Rotterdam; Robert Dur, Erasmus University Rotterdam; Carol Propper, University of Bristol and Imperial College, London; Sarah Smith, University of Bristol
- not-for-profits, management, impure altruism
- JEL codes:
- H8, J24, J45, L33