More Than Altruism: What Does the Cost of Fringe Benefits Say about the Increasing Role of the Nonprofit Sector?

Abstract

Previous research has found that nonprofit organizations pay lower wages than do other organizations. This has been attributed to altruism on the part of workers who are willing to donate some of the value of their time to organizations that support causes in which they believe. This paper extends that analysis to the cost of fringe benefits. Do nonprofit organizations spend less on fringe benefits than do other organizations? Utilizing a data set containing information on wages and fringe benefits in the nonprofit sector we estimate a standard wage equation to test for such a relationship. We find that not only are nonprofit organizations spending less on fringe benefits than are other organizations, but that they are spending significantly less than would be predicted by the previous research on nonprofit wage differentials.

Citation

Emanuele, R. and Simmons, W.O. (2002), "More Than Altruism: What Does the Cost of Fringe Benefits Say about the Increasing Role of the Nonprofit Sector?", American Journal of Business, Vol. 17 No. 2, pp. 31-36. https://doi.org/10.1108/19355181200200008