Voluntary contributions and wages in nonprofit organizations

Abstract

Voluntary work provides a major source of labor for many nonprofit organizations. Consequences of volunteers and paid staff working alongside each other in nonprofits are well documented. This article contributes to this strand of literature and investigates whether the presence of volunteer work influences paid employees' wages in nonprofit organizations. We estimated a multilevel wage equation accounting for personal characteristics of workers and characteristics of nonprofits. The analysis revealed that nonprofit organizations engaging volunteers pay lower wages to their employees. Our findings contribute to the understanding of wage-setting behavior of nonprofits and improve the methodological approach of empirical research in this field.

Greening Austrian social service and healthcare non-profits

“…This study has several limitations, especially with regard to sample size, study period, and the regional focus on Austrian SSHC-NPOs. The focus on large SSHC-NPOs allows us to gain insights into the adoption of environmental matters in the most important fields of the Austrian NPOs with respect number of employees, the economic value creation and the increase of employees in the past decade [ 33 ]. The drawback is that the results are not transferable to other fields of the NPO sector, such as advocacy organizations, cultural NPOs, or NPOs where the main actors are volunteers.…”

“…According to current statistical data, the Austrian NPO sector accounts for 6 % of all employees in Austria. Among the various fields of activities within the Austrian NPO sector, SSHC-NPOs are employers of 54,4 % of the paid workforce in the Austrian NPO sector and generate 58 % of the economic value added of Austrian NPOs [ 33 ]. Among Austrian NPOs, SSHC-NPOs are the ones that are impacted the most by the CSRD, primarily due to their legal forms and size.…”

Effects of the minimum wage on the nonprofit sector

“…2 The difference in objective functions can lead to wage differentials between the nonprofit and for-profit sector (Hirsch, Macpherson & Preston 2018). Under the 'labor donation hypothesis,' workers in the nonprofit sector accept lower wages as a donation to their employer (Preston 1989, Handy & Katz 1998, Narcy 2011, Pennerstorfer & Trukeschitz 2012, Jones 2015, Cassar 2019. Others suggest that nonprofits pay higher wages since they are not impacted by cost reduction incentives like for-profit firms and have higher incentives to employ betterquality workers and pay higher wages (Mocan & Tekin 2003, Butler 2009, Rutherford 2015, Hirsch, Macpherson & Preston 2018.…”

The Prevalence and Distribution of High Salaries in English and Welsh Charities

“…There has been some discussion of the effect of having volunteers on the pay levels of the paid workers. Pennerstorfer and Trukeschitz (2012) review a number of possible connections between pay levels and the presence of volunteers. These include the idea that workers may be expected to 'donate' a degree of labour in a context where some people are donating the entirety of their labour (as volunteers), and that having volunteers may reduce the stress levels of paid workers and hence the need for more compensation.…”