Entrepreneurship among Nonprofit Arts Organizations: Substituting between Wage and Flexible Labor

Abstract

Nonprofit entrepreneurship is largely viewed through the lens of commercialization, overshadowing other ways that entrepreneurship manifests within the sector. One such way involves nonprofits' tendency to meet workforce needs by substituting flexible for wage labor, which may be especially attractive to arts organizations given the proclivity of workers in this sector to be self-employed. The authors examine the use of flexible versus wage labor by nonprofit arts organizations, relying on panel data to account for changes in organizational size over time. The results provide evidence of a substitution effect, in which the use of wage labor by arts organizations declines in response to greater reliance on flexible labor. The findings suggest that nonprofit arts organizations are innovative employers, responding to changes in their resource environments by adjusting their mix of wage and flexible labor while also providing outlets for freelance arts workers to pursue their chosen line of work. Evidence for Practice• Nonprofit arts organizations increase their use of flexible labor as wage labor declines.• Nonprofit arts organizations act as entrepreneurs by dynamically reoptimizing labor workforce composition between flexible and wage labor. • Nonprofit arts organizations combine flexible and wage labor as a means of innovation. • Nonprofit arts organizations provide a critical habitat in which workers can flourish as entrepreneurs, as either wage or flexible employees.

Entrepreneurship in the Public and Nonprofit Sectors

“…Nonprofits operate in a range of industries. In “Entrepreneurship among Nonprofit Arts Organizations: Substituting between Wage and Flexible Labor,” Woronkowicz, Noonan, and LeRoux () explore the arts industries, which tend to rely on nontraditional “flexible” labor in contrast to wage labor. Using over 12,000 panel data observations in 3,276 organizations in three U.S. states, the authors report a strong substitution effect, in the sense that, when nonprofit arts organizations utilize more flexible labor, conventional (wage) labor declines.…”

Remember the Foundation, Keep the Faith, Find What Works, and Focus on the Future

“…We begin with a piece in the nonprofit realm. Woronkowicz, Noonan, and LeRoux (2020) use panel data to examine employment patterns in nonprofit organizations over time. They find that, in nonprofit arts organizations, where there is a proclivity on the part of artists to be self-employed, there is a clear substitution effect of flexible labor for wage labor.…”