Donor Reaction to Salient Disclosures of Nonprofit Executive Pay: A Regression-Discontinuity Approach
Document Type
Article
Publication Date
2016
ISSN
1552-7395
Publisher
SAGE Publications
Language
en-US
Abstract
We evaluate the effect of highly salient disclosure of private college and university president compensation on subsequent donations. Using a differences-in-discontinuities approach to compare institutions that are highlighted in the Chronicle of Higher Education’s annual “top 10” list of most-highly compensated presidents against similar others, we find that appearing on a top 10 list is associated with reduced average donations of up to US$5.0 million in the first full fiscal year following disclosure, despite greater fund-raising by “top 10” schools. We also find some evidence that top 10 appearances are correlated with slower compensation growth and rising enrollment in subsequent years. We interpret these results as consistent with the hypothesis that donors care about compensation but are typically inattentive to pay levels. We discuss the implications of these findings for the regulation of nonprofits and for our broader understanding of the pay-setting process at for-profit as well as nonprofit organizations.
Recommended Citation
David I. Walker,
Donor Reaction to Salient Disclosures of Nonprofit Executive Pay: A Regression-Discontinuity Approach
,
in
45
Nonprofit and Voluntary Sector Quarterly
787
(2016).
Available at:
https://doi.org/10.1177/0899764015609728
