Howard P. Tuckman

A Methodology for Measuring the Financial Vulnerability of Charitable Nonprofit Organizations

This article defines a charitable nonprofit organization as financially vulnerable if it is likely to cut service offerings immediately when a financial shock occurs. It discusses why the vulnerability of the nonprofit sector is of interest to researchers, explores the destabilizing role of third-party finance, considers the reasons for the lack of research on vulnerability, and presents a conceptual framework for identifying finan cially vulnerable nonprofits. Four vulnerability criteria are defined and applied to a 1983 national sample of tax returns filed by 4,730 U.S. charitable nonprofits. The financial data of at-risk organizations are then analyzed to discern the characteristics of vulnerable and other nonprofit organizations.

An Analysis of the Reward Structure in Two Disciplines

The purpose of this paper is to examine the rewards to full-time, male faculty at American universities in two fields: economics and education. A regression equation is used to estimate the relative and absolute returns to particular skills as of the 1972–73 academic year. A method is then given for quantifying the lifetime returns to publication, net of monetary benefits external to the university.Publishers are more highly rewarded than their unpublished colleagues in both disciplines. Economists receive slightly greater remuneration for such activity than do those in education. Diminishing returns set in more rapidly for articles than for books. Outstanding teaching does not appear to be rewarded in either field, while on the other hand public service and administrative skills do command a return.

Nonprofit equity: A behavioral model and its policy implications

This article assumes that nonprofit decisionmakers have an incentive to earn and accumulate surpluses, and it suggests six reasons for this being the case. Based on the assumption that both the program outputs and the equity of a nonprofit yield satisfaction to its decisionmakers, a behavioral model is developed. This is used to derive a demand function for equity, which is then applied to a national sample of 6168 charitable nonprofits drawn by the Internal Revenue Service for the 1985 taxable year. The results substantiate the hypothesis that nonprofit decisionmakers consciously plan to increase their organizations equity. Currently, evidence of continued equity buildup is not sufficient to call into question a nonprofits exempt status, because federal tax laws assume that surplus accumulations will ultimately be used in support of program mission. However, equity accumulation can become excessive. We present several criteria to define excessive equity accumulation and discuss why large equity accumulations may not be in the best interest of society.

Issues in Nonprofit Finance Research: Surplus, Endowment, and Endowment Portfolios

As the first systematic attempt to identify the issues involved in the use of large data sets to examine nonprofit surpluses and endowments, this paper provides suggestions for how best to ensure that the data are consistent and useful. We introduce five definitions of nonprofit surplus (the analogue of profit) and identify when researchers should use one in preference to the other. The distinctions are especially important when analyzing endowed organizations because surpluses affect the amount and rate of accumulation of endowment assets. Conversely, an endowment affects how managers and analysts should calculate surplus. Information on IRS 990 reports is incomplete, so we explain how to construct a pro forma endowment portfolio and endowment spending from available data for the purpose of calculating operating surplus of endowed organizations. We argue that researchers doing statistical analyses with large data bases should distinguish between endowed organizations and those without endowments because their financial behavior may differ. To lump them together is likely to distort statistical results. Finally, we discuss practical issues of data cleaning when using data from IRS 990 reports.

The Structure of Salaries at American Universities.

The purpose of this paper is to analyze the determinants of salary structure at American universities. Data from a national survey offaculty members are used in a regression equation to estimate the effects of publications, personal characteristics, geographical region, and field of specialization. The results suggest that those who publish are more highly rewarded than their unpublished peers, faculty engaged in teaching receive lower salaries than either researchers or administrators, aging has a negative effect beyond age 50, and salaries vary substantially byfield.

The Goods Produced By Nonprofit Organizations

Nonprofit organizations produce a range of goods and services from the purely public to the purely private. Within the two extremes fall a majority of their outputs. This article explores the question of what determines a nonprofits mix of goods. It first develops a method to measure the product mix of charitable nonprofit organi zations. A testable model is then offered and applied to a national database consisting of tax returns filed with Internal Revenue Service by tax-exempt charitable nonprofits. The results indicate that the output mix can be explained by institutional characteristics, types of activity, and community-based factors. The article concludes with a discussion of whether, given the evidence, public subsidies to charitable nonprofits should be based on the outputs these entities produce.

Travel demand functions for Florida bound tourists

Abstract This paper postulates functions for explaining and predicting tourist traffic to Florida. Traditional demand determinants, income and price, are included in the explanatory variable set, and two specifications of the functions are considered. Attention is confined to the auto and plane modes since they account for almost all Florida tourists. The equations are formulated in compliance with specific needs of the State. The data, which cover the period 1961I–1974II, are described in detail. Estimation of the demand equations involves the forty-six quarters ending 1972II with the remaining eight quarters reserved for ex post forecasting. These forecasting results are then compared with those from four naive models. Some effects of the energy crisis appear in the findings, and implications of the analysis for that issue are briefly discussed. Because of multicollinearity the functions are estimated by ridge regression. Straightforward application of ordinary least squares leads to theoretically incorrect algebraic signs in the auto equations and general imprecision in most equations. These anomalies are eliminated by a simple transformation of the data matrix according to the ridge criterion. Models of the type examined here can provide a geographic region with information on important aspects of its tourist population. They can also aid planners in the development of policy.

The Profits of Not-For-Profit Hospitals

This paper explores the profits of not-for-profit (NFP) hospitals and identifies the factors that determine whether such profits are adequate. A model which relates hospital charges to surpluses is used to derive NFP surplus from gross patient charges and operating costs. This is done to identify the items contributing to surpluses and to explore the dispersion of NFP surpluses. We first discuss why the literature is relatively silent on NFP profitability. We then present the model and use Tennessee hospital data to identify how its components vary by hospital type and through time. The dispersion of surpluses among NFPs is then examined. We next propose three rate of return measures of profitability and use these to relate NFP profits to select characteristics of hospitals and their environments. Several alternative profit levels of NFP are discussed, and the factors that are relevant to the issue of determining the adequate level of profit are identified. The paper ends with a plea for better data on NFP profits.

The lengthening of time to completion of the doctorate degree

Time to completion of the doctorate is at a high for the century in the United States. This paper examines completion time in 11 scientific and engineering fields in the period 1967–1986, using the cohort of doctorate recipients for analysis. On average, it finds a 20% increase in completion time. Four measures of time are explored and time trend analysis reveals the existence of two patterns of increase: U-shaped and inverted U. Evidence is reported of convergence of the time distribution around the cohort mean and time spent enrolled at the university is shown to be the major source of the rise.

The Effects of Tuition Level and Financial Aid on the Demand for Undergraduate and Advanced Terminal Degrees.

Abstract This paper examines what is known about the effects of tuition level and financial aid on graduate enrollments and the stock of scholars with advanced terminal degrees. The demand for education is not defined in the traditional way as first year enrollments. Rather, a simultaneous equation model is developed which explicitly formulates the interrelated nature of the several demand functions representing progression through higher education. Within this framework, the findings from several statistical and methodological approaches to the demand for education can be analyzed, with a view to reaching a consensus as to the effects of tuition and financial aid at each stage of the choice process.