Governance, Performance, and Compensation in Nonprofit Organizations: A Review of Recent Empirical Nonprofit Research

After years of limited exploration, nonprofit¹ empirical research has surged in prominence, fueled by a plethora of machine-readable datasets and an ever-increasing number of published studies since 2016 (Mercado, Parsons, and Smith 2022).²Mercado et al. (2022) provide a thorough analysis of the trend of empirical nonprofit research over the last two decades, data sources used, research topics investigated, and journal outlets for these publications. Feng and Greenlee (2023) summarize the major data sources used by nonprofit empirical research and data issues, along with resolutions, in their book chapter of the Nonprofit Empirical Research Handbook. In this study, based on the main thrusts of recent nonprofit empirical research, we delve into the governance, performance, and compensation of nonprofit organizations, providing an up-to-date and comprehensive literature review by surveying recent empirical research. Our work complements the existing surveys by Mercado et al. (2022) and Feng and Greenlee (2023), contributing to the evolving understanding of nonprofits. As we explore this growing area of accounting research, we seek to uncover the intricacies and nuances that shape nonprofit practices, offering valuable insights to the scholarly community and practitioners.

Our study provides unique contributions that distinguish it from Mercado et al. (2022) and Feng and Greenlee (2023). First, this study offers a more detailed literature review of recent nonprofit empirical research on topics such as governance, performance, and compensation. This focus on topics allows us to dig more deeply into the nuances and challenges faced by nonprofit entities in these areas. For example, within governance, we cover papers on auditing, financial regulation, and governance (including fraud) in nonprofit organizations.

Second, our study goes beyond the scope of prior research by collecting and organizing papers published in major nonprofit journals since 2016. We curate these papers and organize them in tables based on accounting areas in chronological order. Furthermore, in addition to providing references, we highlight and summarize the major findings of each study. This comprehensive presentation of the most recent research facilitates a more thorough understanding of the examined topics and opens avenues for researchers to explore new and exciting areas in nonprofit empirical research.

These distinct contributions could make our study invaluable to scholars seeking insights into recent trends in empirical research, particularly within the context of nonprofit organizations. Moreover, our organized collection of recent papers is relevant and of interest to board members and nonprofit professionals who are eager to stay updated with the latest developments in the field.

The remainder of this paper is organized as follows. The next section presents a literature review of recent representative empirical nonprofit research. We then provide a summary of this study, including suggestions for new research areas. Finally, in  Appendix A, we provide an annotated bibliography, in table format, of nonprofit empirical research published in selected nonprofit and major accounting journals since 2016, organized chronologically by accounting topic and area.³

In this section, we discuss recent representative empirical research on governance, performance, and compensation in nonprofit organizations. For governance, we include papers dealing with areas of auditing, financial regulation, and other governance-related issues. In the area of performance, we review papers that primarily focus on missions and goals, financial management, and stakeholder engagement. For compensation, we examine studies on executive compensation and gender equity. Within each topic, the selected empirical research conducted in related accounting areas is briefly described in chronological order. We only selected papers published in major journals that publish nonprofit research: Accounting Horizons; Accounting, Organizations and Society; Auditing: A Journal of Practice & Theory; Contemporary Accounting Research; Financial Accountability & Management; Journal of Accounting, Auditing & Finance; Journal of Accounting and Public Policy; Journal of Accounting Research; Journal of Governmental & Nonprofit Accounting; Journal of Public Budgeting, Accounting & Financial Management; Nonprofit Management & Leadership; Nonprofit and Voluntary Sector Quarterly; Review of Accounting Studies; The Accounting Review; and Voluntas.

Effective governance plays a pivotal role in ensuring transparency, accountability, and responsible decision making in the nonprofit sector. This section comprehensively reviews the most recent empirical research on auditing, financial regulation, and other governance-related issues. In doing so, we hope to shed light on the critical role of governance structures and practices in fostering organizational integrity, financial stability, and overall effectiveness.

Many nonprofit organizations are small, with minimal revenue, and employ few, if any, employees. However, a significant number of organizations undergo annual audits because of such factors as funding sources, state regulations, or board requirements. Most nonprofit audit research in this sector has used the Single Audit Database maintained by the Federal Audit Clearinghouse (FAC) and Audit Analytics.⁵

Two recent studies investigate audit market and auditor specialization in the nonprofit sector. Feng and Elder (2017) examine the impact of the enactment of the Sarbanes-Oxley Act (SOX) on nonprofit organizations. They find that downward switches from Big 4 to non-Big 4 auditors post-SOX depend on the nature of the organization. Nonprofits with internal control deficiencies are more likely to switch to a non-Big 4 auditor. Harris, Tate, and Zimmerman (2019) document a positive association between utilizing non-Big 4 local industry specialist auditors and nonprofits having higher governance quality, poorer financial health, and greater complexity. Furthermore, they report that nonprofits employing these types of auditors experience a shorter audit report lag and more future direct donations than nonprofits audited by non-Big 4 local nonspecialist auditors.

The interplay between audit and reporting quality is another significant research area. Fitzgerald, Omer, and Thompson (2018) find evidence of negative associations between audit partner tenure and both the incidence and severity of reported internal control deficiencies (ICDs) and the quality of internal control reports. Garven, Beck, and Parsons (2018) investigate the effects of several audit-related factors on nonprofit financial reporting quality (FRQ) and report that FRQ increases when nonprofits have specialist auditors and unexplained audit fees.⁶ In addition, they discover that, contrary to findings in for-profit research, the largest accounting firms do not necessarily provide higher reporting quality. McGowan, Chan, Yurova, Liu, and Wong (2018) report that the audit quality of nonprofit hospitals improves when audit firms enhance their audit and engagement practices under increased regulatory pressures. Feng (2020a), in her examination of auditor-in-charge characteristics in nonprofit organizations, reports that female auditors tend to report more internal control deficiencies and issue more qualified audit opinions. In addition, she finds that auditor tenure is negatively associated with the likelihood of issuing internal control reports.

Other recent studies examine the association between audit and governance, compensation, and donors’ reactions to audit results, such as going-concern audit opinions. Amin and Harris (2017) find that, although sophisticated donors donate less after a going-concern opinion, unsophisticated donors donate more. Waymire, Webb, and West (2018) document that nonprofit auditees, compared to government auditees, report fewer internal control deficiencies, but more incidences of questioned costs related to major programs. Feng (2020b) finds that a lack of compliance with laws and regulations and internal control weaknesses increases the likelihood that a nonprofit receives a going-concern opinion and is thus more likely to discontinue operations. Harris and Neely (2021) report that nonprofits are more transparent when they have stronger governance, have better performance, have more professional staff, are more reliant on contributions, and are located in states that require public disclosure of audited financial statements. Finally, Bradley, Forgione, and Michalek (2022) find that nonprofit charter schools decrease executive compensation when internal control deficiencies are reported in Single Audit internal control reports.

The financial regulation of nonprofit organizations is a subject of growing interest in empirical research. Haque and Irvine’s (2018) examination of Australian mandated climate change disclosures reveals that nongovernmental organization (NGO) disclosure rates are much higher for commitment (to climate change) than to actual carrying out these commitments. Crawford, Morgan, and Cordery (2018) document empirical evidence from a global survey involving respondents with experience in nonprofit reporting across 179 countries, highlighting support for the development of international financial reporting standards for nonprofits. Islam and van Staden (2018) find that the collaboration of electronic reliant industries with NGOs and activist protestors leads to more comprehensive and transparent disclosures. McConville and Cordery (2018), using data from four English-speaking countries, develop a new typology of regulatory approaches to performance reporting, finding their typology to be helpful in jurisdictions regulating their charity sector and encouraging performance reporting. Boomsma and O’Dwyer’s (2019) study discloses how the constant modifications in Dutch governmental regulations and programs over time have influenced shifts toward cost-consciousness, increased professionalization, and enhanced NGO cooperation. Interestingly, the competition for funding has become an objective of accountability, rather than a means to attain accountability. Lee and Woronkowicz (2019) report that agency problems do not effectively explain how nonprofits manage extra cash. Instead, managers appear to make decisions based solely on the level of cash holdings. Their results reveal that government funding can simultaneously monitor unscrupulous behaviors among managers, while also potentially restraining investments in human capital.

One stream of research on nonprofit financial regulation focuses on the impact of accounting regulations on revenue. Barber, Farwell, and Galle (2022) find that donors penalize organizations with high fundraising costs when there is mandatory or involuntary disclosure by a third party. Duguay (2022) merges IRS data with data obtained from the Bureau of Labor Statistics, Bureau of Economic Analysis, and Lexis-Nexis to provide evidence on the effects of state financial audit mandates in the nonprofit sector. He finds that state audit mandates result in a higher proportion of taxpayers who donate, with donations going to a wider variety of nonprofit organizations.

Another study by Lott, Shelly, Dietz, and Mitchell (2023) develops a state-level charity regulatory breadth index (RBI). This index enables nonprofit researchers to place state-level charity research within a broader framework by including state-level regulations in analyses across states. More importantly, RBI allows state policymakers to benchmark regulations against their peers.

Other governance-related issues in the nonprofit accounting literature primarily deal with accountability diversity, board relationships, internal control, and fraud. Cordery and Sim (2018) find that, in New Zealand, civil society organizations across various categories perceive themselves as being equally accountable to both upward and downward stakeholders and engage in extensive reporting to both. Bloch, Harris, and Peterson (2020) find that board-interlocked organizations (where a board member from one organization joins the board of a separate organization) have better governance practices, are more efficient, and report more donations than noninterlocked organizations. A study of Spanish nonprofits and their board members by Garcia-Rodriguez, Romero-Merino, and Santamaria-Mariscal (2021) surprisingly finds no significant relationship between a multidimensional model of financial vulnerability and three measures of board composition: board structure, directors’ experience, and education. Cody, Lawrence, Prentice, and Clerkin (2022) report that selecting nonprofit charter school board members because of their knowledge of the organization is associated with higher levels of accountability activities. Conversely, choosing board members because they are friends or acquaintances of current board members is associated with lower levels of accountability activities. Yetman (2022) examines the relationship between director compensation and private foundation performance and finds that private foundations compensating their directors not only make smaller charitable distributions each year, but are more likely to distribute only the legal minimum over time.

Although the Sarbanes-Oxley Act of 2002 was enacted in response to numerous corporate scandals in the early 2000s, many nonprofit entities adopted at least some of its governance provisions, such as developing a written code of conduct, periodically assessing and improving internal controls, and adding audit committees to boards of directors. However, these changes did not occur in all nonprofit organizations. Boland, Harris, Petrovits, and Yetman (2020) examine the relationship between several measures of nonprofit governance and nonprofit funding, reporting quality, and executive compensation, finding that an index using the sum of five binary indicators (audit committee, majority independent board, no outsourcing, CEO salary review, and information available on the nonprofit website) performs best overall.

Much research has been conducted in the area of fraud in nonprofit organizations. Archambeault and Webber’s (2018) examination of the survival of nonprofit organizations after the discovery of fraud reveals that more than one-fourth of organizations experiencing fraud do not survive for at least three years. Organizations that do not survive tend to be newer and smaller. Scheetz, Smalls, Wall, and Wilson (2022) document that individuals employed in larger nonprofit organizations are more likely to admit that they intend to report fraud than those employed in smaller nonprofits. Scheetz et al. (2022) later find that although the mere presence of internal control policies in for-profit organizations increases the intention to report fraud, in nonprofit organizations, the existence of strong monitoring activities in addition to internal control policies is necessary to increase the intent to report fraud. In their examination of the use of Benford’s Law⁷ to determine the accuracy of nonprofit financial statements, Qu, Steinberg, and Burger (2020) find that deviations from Benford’s Law (a fraud indicator) are smaller for organizations that are more professional, report positive fundraising and administration expenses, and face stronger funder oversight. Finally, Lamothe, Ter-Mkrtchyan, Ruddle, and Kuyon (2023) confirm previous findings in their study of the relationships between nonprofit misconduct and good governance measures.

For-profit organizations have one goal: profit maximization. Unlike for-profits, nonprofits do not exist to maximize profits, but to provide services to their constituents. Both the types of nonprofits and their range of services can be extensive. Thus, it is challenging to find standardized performance measures for this sector. Harris, Neely, and Parsons (2022) address challenges in measuring nonprofit performance, highlighting the limitations of traditional spending ratios like the program ratio. They propose the inclusion of “mission metrics” to focus on program outcomes and recommend regulatory changes to enhance Form 990 reporting. They also advocate for user-friendly digital dissemination of nonprofit information and suggest avenues for future research to improve performance measurement and reporting. In comparison to Harris et al. (2022), our paper offers a comprehensive summary of how nonprofit performance is typically evaluated, considering factors such as an organization’s mission and goals, financial management, and stakeholder engagement.

At the heart of nonprofit performance lies their mission and goals, which serve as the guiding compass that drives their actions and provides the foundation for measuring their performance and impact. Yoshioka (2017) reports that member-serving nonprofits are more likely to represent members’ interests directly, whereas broader constituency-serving nonprofits are more likely to adhere to the mandates of their broader constituents. Mitchell and Calabrese (2023) examine how following common fiscal norms (such as overhead minimization, fiscal leanness, revenue diversification, and debt avoidance, among others) affects mission, using total spending as a proxy for mission. They find that norm-adhering nonprofits appear to sacrifice about half of their mission impact over a ten-year period compared to norm-busting nonprofits.

Several recent studies have examined the expenses and effectiveness of nonprofit organizations. Mitchell and Berlan (2016) find that the most important catalysts for rigorous evaluation are the urge to improve program effectiveness and legitimacy; the most important obstacles are the lack of resources, such as time and money. Furthermore, they discover that evaluations are more rigorous if they are intrinsically motivated rather than externally mandated. Altamimi and Liu (2022) discover that the optimal level of overhead is captured by an inverted U-shaped relationship between overhead cost ratio and program outcomes. Once increased overhead spending reaches the optimal point, further overhead spending fails to improve program outcomes and can yield negative returns. Berrett (2022) finds that greater nonprofit effectiveness, as measured by the number of houses built and revenue raised, is obtained through an increase in the overhead ratio. This increase in effectiveness will continue to improve, but at a lower rate, once the overhead ratio reaches 15 percent, which is consistent with the findings of Altamimi and Liu.

Many external evaluators, watchdog organizations, grant makers, and individual donors use ratios to measure the effectiveness of nonprofits in making their funding decisions. Consequently, scholars have studied the impact and accuracy of these ratios. Garven, Hofmann, and McSwain’s (2016) literature review of program ratio management reports that misreporting and alteration of actual dollar spending does occur in this sector. Quosigk and Forgione’s (2018) study investigates program expense ratios in nonprofit hospitals, finding that hospitals receiving support from unconsolidated affiliates report significantly higher program ratios. Allen and McAllister (2019) find that private foundations (especially more sophisticated ones) focus more on program accomplishments than on reported efficiency when making capital campaign grant decisions.

Financial management is a critical aspect of nonprofit performance, influencing an organization’s ability to fulfill its mission and achieve long-term sustainability. Several recent studies have examined the impact of revenue composition on nonprofit efficiency. De los Mozos, Duarte, and Ruiz (2016) find that increased revenue diversification leads to higher operational inefficiencies. Ecer, Magro, and Sarpça (2017) report that nonprofits that rely mainly on commercial revenues manage their overhead and administrative expenses more efficiently than those relying primarily on donations. Zhai, Watson, Gilchrist, and Newby (2017) present three symptoms indicative of nonprofit vulnerability in Australia—significant increases in unit costs/delivery hours, a substantial rise in the proportion of administration to program expenses, and a diminished ability to pursue the organization’s mission. They also discuss potential causes, including board inadequacies, external environmental threats, project management issues, and funding constraints. Hung (2021) documents that commercial revenues tend to crowd out donations in human service organizations, partly because of a reduction in fundraising activities. Hung and Berrett (2023) examine the relationships between increased commercialization and greater nonprofit efficiency, finding that commercialization contributes to nonprofit efficiency, at least in the performing arts, and that this relationship is greater for organizations receiving less government funding.

Many studies have examined various aspects of the capital structure of nonprofit organizations. Several recent studies have focused on long-term debt. Gaver, Harris, and Im (2016) find that donor use of bond ratings is limited to hospitals and universities. Beck, Gilstrap, Rippy, and Vansant (2021) use data from the State of California Office of Statewide Health Planning and Development to document that nonprofit hospital managers lower bond costs by shifting costs from bad debt to charity care prior to issuing a public bond. Garcia-Rodriguez, Romero-Merino, and Santamaria-Mariscal (2022) examine whether financing decisions in nonprofit organizations located in the United Kingdom (U.K.) are made according to the trade-off⁸ or pecking order⁹ theories of capital structure and find evidence that the pecking order is used. They also report that less than half of their sample use long-term debt and that debt maturity is longer in larger organizations, those with more tangible assets, and those with higher liquidity. Su, Yan, and Harvey (2022), in their examination of the revenue and capital structures of more than 30,000 United Methodist churches, also find evidence supporting the pecking order theory in church mortgage loan borrowing, where organizations in need of funds turn first to internal resources, then to debt, and finally to donors.

A growing stream of nonprofit research offers valuable insights into the management and impact of endowments and savings. Qu (2020, 2021) and Ely, Katz, and Calabrese (2020) investigate the use of endowments in this sector. Qu (2020) finds that significant cross-sectional differences exist between sectors in endowment spending. Ely et al. (2020) find that few nonprofits manage to build a meaningful endowment in 20 years, starting from scratch. Interestingly, Qu (2021) also finds that nonprofits do not use their endowments as emergency funds. In a more recent study, Irvin and Furneaux (2022) document sharp differences among 25 nonprofit subsectors in optimal savings levels, ranging up to one year of total expenses. They suggest that nonprofits should consider a broader context of financial resilience that includes correctly sized reserves for a resilience strategy.

Numerous studies focusing on the for-profit sector have developed measures to predict financial distress. To date, most nonprofit scholars have focused on the relationship between diversified revenues and risk. Grasse, Whaley, and Ihrke’s (2016) study of arts organizations finds no association between diversified revenue streams and reduced risk. Hung and Hager (2019) report only a small positive relationship between revenue diversification and financial health in their meta-analysis of the impact of revenue diversification on financial health. Thornton and Lecy (2023) merge the Federal Assistance and Awards Database with IRS data to explore whether government funding helps or hurts the financial health of nonprofit organizations, finding that, overall, government funding improves fiscal health. Mayer (2023), in his examination of the link between revenue volatility and dissolution in U.S. public charities, finds that a 10 percent increase in revenue volatility predicts an increase in the risk of dissolution to between 7 percent and 14 percent. Surprisingly, volatility may be a greater threat to older organizations than to newly formed ones.

Accounting research has historically been drawn from both the finance and economic literatures. Nonprofit researchers are increasingly using these studies to explain their findings. Qu (2019) uses modern portfolio theory to estimate the degree to which revenue concentration is related to portfolio risk. She finds that higher revenue concentration is negatively related to portfolio risk for nonprofits relying on government grants, but positively related to organizations relying on donations. Liu and Kim (2022) use Wilsker and Young’s (2010) benefits theory to determine whether arts nonprofits are financially stronger if their income sources reflect the mix of the benefits they provide. They discover that a benefit-based financing strategy can help nonprofits improve their overall financial health only if they can generate a substantially large proportion of revenue from benefit-based sources.

Finally, two recent studies examine the impact of geographical and population changes on nonprofit revenues. Woronkowicz and Nicholson-Crotty’s (2017) investigation of capital campaigns shows that a major capital campaign conducted by one nonprofit positively affects fundraising by other geographically close nonprofits. Le Barbenchon and Keister (2022) merge IRS 990 data with the American Community Survey to examine the impact of changes in local immigration populations on the financial responses of nonprofits to these changes. They find that nonprofit financial activity increases (decreases) with growth (decline) in immigrant populations.

Stakeholder engagement plays a pivotal role in assessing nonprofit performance and understanding its broader impact on society. Recent studies have provided valuable insights into the factors influencing donations and other types of funding in the nonprofit sector. Parsons, Pryor, and Roberts (2017) report that nonprofit managers perceive increased pressure to manage efficiency ratios when their organizations are funded, at least in part, by restricted donations and/or government grants. Hyndman and McConville (2018) propose a new framework of effectiveness reporting centered around managerial decision-making for U.K. charities to enhance accountability and legitimacy. James (2018) reports that current donors of noncash assets tend to increase cash donations in both present and future periods. Ressler, Paxton, and Velasco (2021) look at donations from a broader perspective and find that nonprofits operating in a more favorable ecological context, such as those appealing to religion, and organizations with more volunteers report higher donations. Yates, Belal, Gebreiter, and Lowe’s (2021) study of grant-making activities of service clubs in the U.K. concludes that the most important method of accountability is the personal relationships formed between club members and outside organizations. Altamuro, Bierstaker, Chen, and Harris (2022) investigate the impact of organizational religious identity on donations and government grants. They find that increased donations are related to nonprofits located in more religious geographic areas, those with unrestricted donations, and organizations with better stewardship. In addition, they report that government grants are negatively associated with organizational religious identity.

Since nonprofits compete in the marketplace for contributions, “watchdog” organizations have arisen that rate financial stewardship and claim to assist donors in their decision-making. Harris and Neely (2016) find that rated organizations receive significantly higher donations than unrated ones, that the level of donations increases as the number of ratings increases, and that organizations receiving both negative and positive ratings receive more donations than unrated ones.

Finally, Kim and Mason (2018) examine the relationship between constituent and community racial and ethnic compositions, leader tenure, and the level of advocacy in arts organizations. They find that both constituent and community racial and ethnic compositions are positively associated with the level of advocacy. For example, arts nonprofits employing leaders with a longer tenure in the arts industry are more likely to engage in advocacy than other similar organizations.

This section examines research on executive compensation and gender inequity in nonprofit organizations. It explores the IRS requirements for “reasonable and not excessive” compensation, bonus payments, perks, or donor reactions to high CEO compensation. Additionally, this section addresses gender pay gaps and the negotiation dynamics that impact compensation practices.

The nonprofit sector differs from the for-profit sector in that the Internal Revenue Service requires that the compensation of the five highest-paid employees of a nonprofit entity must be “reasonable and not excessive.”¹⁰ In addition, the process used to establish compensation must be described in Form 990, and total compensation, if more than $100,000, should be publicly disclosed.¹¹

Several recent studies have focused on bonus compensation and perks in the nonprofit sector. Balsam and Harris (2018) focus on the use of perks in nonprofit organizations. Using a subset of nonprofits that filed compensation information (Schedule J) with their Form 990, they find that even though the payment of bonuses is negatively associated with board oversight, donations, and grants, the existence of bonuses is positively associated with profitability, firm size, available cash, and the use of compensation consultants and committees. Balsam, Harris, and Saxton (2020) document that almost one-quarter of nonprofit organizations in the sample provide one or more executives with perks, such as housing allowances, first-class travel, or health club memberships. Perks are more likely to exist in larger nonprofits with excess endowments, fewer governance policies, and fewer external monitors.

Some recent studies examine nonprofit workers’ overall compensation and donor reactions to high CEO compensation. Cui (2020) documents that nonprofit workers earn 4.3 percent less than comparable for-profit workers, after controlling for industry and occupation effects. Kaden, Peters, Sanchez, and Fleischman (2022) report that contributors react negatively to high relative CEO compensation when it constitutes a large portion of the organization’s total expenses. However, this negative reaction is not significant when absolute executive compensation is high.

Gender inequity is another issue that has been addressed in recent compensation studies. L’Herrou and Tynes (2020) investigate the existence of a gender pay gap in nonprofit organizations. They discover that, even after controlling for organization size, female executives average 12 percent less compensation than male executives. Finley, Hall, and Marino (2022) find that female nonprofit executives earn 8.9 percent less than male nonprofit executives. Additionally, this discrepancy increases in settings where negotiations play a larger role in determining compensation.

Empirical nonprofit research has increased, and publication outlets for nonprofit research have expanded over the last two decades (Mercado et al. 2022). This study has surveyed nonprofit research published between 2016 and 2022 on governance, performance, and compensation. Our paper complements the studies of Feng and Greenlee (2023) and Mercado et al. (2022) by organizing these papers according to accounting areas. Researchers, whether experienced or new to nonprofit research, can learn about the major findings of these studies in each area. The information provided by this paper can help researchers explore what has been done recently in each of these areas and identify new research topics.

Although the quantity and quality of nonprofit research have exploded in recent years, many new and interesting research topics are available. Thus, exciting opportunities to explore and advance our knowledge of nonprofit organizations remain.

• Artificial Intelligence (AI) for Nonprofits: Researchers can investigate how nonprofits can leverage AI technologies to enhance their operations, decision-making processes, and impacts. This research could explore AI-driven strategies for fundraising, donor engagement, program evaluation, and optimizing resource allocation to increase overall organizational efficiency and effectiveness. See, for example, Alsolbi et al. (2023), Iskandarova and Sloan (2023), and Cai and Xie (2024). In addition, fraud detection can be a potential avenue for AI-related research (see Cai and Xie 2024).¹²

• Sustainable Practices in Nonprofits: This area could delve into how nonprofit organizations can adopt eco-friendly practices and integrate sustainability principles into their mission and activities. Researchers can explore the benefits of sustainable initiatives in terms of cost reduction, community engagement, and improved organizational reputation. For example, see Benavides, Felipe, and Ehrenhard (2021) and Nordin, Khatibi, and Azam (2024).

• Blockchain Technology for Transparency: Researchers can explore how nonprofits could utilize blockchain to increase transparency, accountability, and trust in stakeholders. An investigation of the feasibility and impact of blockchain-based donation tracking, grant management, and impact measurement can be of great interest to the nonprofit sector. See, for example, Shin, Kang, and Bae (2020), Howson (2021), and M. Lee, S. Lee, H. Lee, and Gim (2023).

• LGBTQ+ Representation in the Nonprofit Sector: This research area could examine the representation and experiences of LGBTQ+ individuals in nonprofit leadership and the workforce. Understanding the challenges faced by LGBTQ+ nonprofits and exploring strategies to promote inclusivity within the sector would be important areas of investigation. This stream of research could explore, for example, the career trajectories, salaries, and hiring experiences of LGBTQ+ versus non-LGBTQ+ nonprofit employees. See, for instance, Meyer, Dale, and Willis (2022) and Velasco and Paxton (2022).

• Diversity, Equity, and Inclusion (DEI) Practices in Nonprofit Governance: Researchers can explore how nonprofit boards and leadership teams could promote diversity and ensure equitable representation. This stream of research can assess the impact of diverse leadership styles on organizational performance and social impact. For example, see Azevedo, Gaynor, Shelby, and Santos (2021), LeRoux and Medina (2023), and Sessler Bernstein and Fredette (2024).

• The presence and role of immigrants in the nonprofit sector provide another intriguing avenue for study. Researchers can explore how regions with high immigrant populations differ from those with fewer immigrants in terms of the types and quantity of nonprofit organizations, funding sources, and the overall impact on the community. Understanding the funding sources and lifecycle of nonprofit organizations in immigrant-heavy areas could provide valuable insights into strengthening social support structures. See, for example, Chand, Calderon, Hawes, and O’Keefe (2021) and Kim, Potochnick, and Olson (2022).

• The ongoing search for measures associated with outputs or successes in meeting the mission goals offers further exploration opportunities. For instance, see Brown and Fan (2023). One growing social movement, effective altruism (also known as instrumental philanthropy), focuses specifically on maximizing the social impact of each philanthropic dollar (Greaves and Pummer 2019). For more information on effective altruism, see Ferris and Graddy (2020), Adams, Crary, and Gruen (2023), Kassirer, Levine, and Kouchaki (2023), and Taggart and Cooper (2023).¹³

By integrating AI, sustainability, blockchain, LGBTQ+, and DEI into these potential nonprofit empirical research areas, scholars can deepen our understanding of the nonprofit landscape, foster positive change, and contribute to building more resilient and effective organizations that address societal challenges while promoting inclusivity and sustainability.