Governance of Not-for-Profit Organizations

September 30 - October 1, 2004
A Conference Jointly Sponsored by the Federal Reserve Bank of New York, the Bendheim Center for Finance of Princeton University, and the Journal of Accounting and Economics.

Introduction
Few public policy issues have taken center stage as quickly as governance. In the not-for-profit sector, investor-donors, regulators, tax authorities, and academics are examining the decision-making processes of organizations, and, in some cases, are proposing changes to governance structures to enhance efficiency and accountability.

Despite this recent attention, the effect of governance on the performance and overall health of firms in the not-for-profit sector has received less academic scrutiny than it has in the for-profit sector. Given the growing role of not-for-profits in the U.S. economy, a better understanding of sound governance practices in the sector is essential to all stakeholders. Moreover, to evaluate the effect of reforms on the governance of not-for-profit firms, it is also important to understand current governance practices as well as how governance differs between for-profit and not-for-profit firms.

This conference aims to broaden the understanding of these and other key governance issues by presenting a wide range of distinguished, current research on the governance of not-for-profit organizations.

More Information
There is no registration fee for attending the conference. However, because seating is limited, you must register in order to attend.

Preliminary Agenda
Thursday, September 30
8:15 a.m. Continental Breakfast
9:00 a.m. Welcoming Remarks:
Christine M. Cumming, First Vice President, Federal Reserve Bank of New York
SESSION 1: MANAGEMENT OF FUNDS AND REGULATORY ISSUES IN NOT-FOR-PROFITS

Session Chair: Henry Hansmann, Law School, Yale University
9:15 a.m. Investment Management of Charitable Funds

Harvey Dale, Law School, New York University

Nonprofits under the Microscope: Current Regulatory Challenges and Practical Responses

James Schwartz, Manatt, Phelps & Phillips, LLP

10:30 a.m. Break
SESSION 2: THE ROLE OF INCENTIVES AND OWNERSHIP IN NOT-FOR-PROFITS

Session Chair: Michael Nelson, Federal Reserve Bank of New York
10:50 a.m.

Are the Incentives Right?

Richard Steinberg, Department of Economics, Indiana University-Purdue University Indianapolis

What Difference Does Sector Make? An Agenda for Research on Ownership Effects

Joseph Galaskiewicz, Department of Sociology, University of Arizona

12:15 p.m. Lunch
Speaker: Marion Fremont-Smith, Kennedy School of Government, Harvard University
SESSION 3: INCENTIVES AND GOVERNANCE IN NOT-FOR-PROFITS

Session Chair: Patrick Bolton, Department of Economics, Princeton University
2:00 p.m. Agency Problems of Excess Endowment Holdings in Not-for-Profit Firms PDF

John E. Core, Wharton School, University of Pennsylvania
Wayne R. Guay, Wharton School, University of Pennsylvania
Rodrigo S. Verdi, Wharton School, University of Pennsylvania

Discussant: Rajesh Aggarwal, McIntire School of Commerce, University of Virginia
3:00 p.m. Are Nonprofits Efficient? A Test Using Hospital Market Values Word

Paul Gertler, Haas School of Business, University of California at Berkeley
Jennifer Kuan, Institute for Policy Research, Stanford University

Discussant:
R. Lawrence Van Horn, Simon Graduate School of Business Administration, University of Rochester
4:00 p.m. Break
4:15 p.m. Governance Mechanisms in Collaborative Relationships Involving Not-for-Profit Organizations PDF

Conrad S. Ciccotello, Georgia State University
Michael S. Piwowar, Iowa State University and U.S. Securities and Exchange Commission

Discussant: Gerry Wedig, Simon Graduate School of Business Administration, University of Rochester

Friday, October 1
8:15 a.m. Continental Breakfast
SESSION 4: COMPARING FOR-PROFIT AND NOT-FOR PROFIT ORGANIZATIONS

Session Chair: Hamid Mehran, Federal Reserve Bank of New York
8:45 a.m. Incentive Differences of Public and Private Firms PDF

Fan Zhang, Department of Economics, Northwestern University

Discussant: Holger Mueller, Stern School of Business, New York University
9:45 a.m. Are Nonprofit Firms Simply for-Profits in Disguise? Evidence from Executive Compensation in the Nursing Home Industry PDF

Anup Malani, Law School, University of Virginia
Albert Choi, Department of Economics, University of Virginia

Discussant: John E. Core, Wharton School, University of Pennsylvania
10:45 a.m. Break
11:00 a.m. Governance Lessons from the Not-for-Profit World

Paul Levy, Chief Executive Officer, Beth Israel Deaconess Medical Center
12:00
p.m.
Lunch
SESSION 5: PERFORMANCE DISCLOSURE AND MONITORING OF NOT-FOR-PROFITS

Session Chair: Ross Watts, Simon Graduate School of Business Administration University of Rochester
1:15 p.m. Constraining Managers without Owners: Governance of the Not-for-Profit Enterprise PDF

Mihir Desai, Harvard Business School
Robert Yetman, School of Management, University of California at Davis

Discussant: Andrew Metrick, Wharton School, University of Pennsylvania
2:15 p.m. Corporate-Sponsored Foundations and Earnings Management PDF

Christine Petrovits, Kenan-Flagler Business School, University of North Carolina at Chapel Hill

Discussant: Anne Beatty, School of Business, Ohio State University
3:15 p.m. Break
3:30 p.m. The Effects of Governance on the Financial Reporting Quality of Nonprofit Organizations PDF

Michelle Yetman, School of Management, University of California at Davis
Robert Yetman, School of Management, University of California at Davis

Discussant: Richard Sansing, Tuck School of Business, Dartmouth College, and Tilburg University
4:30 p.m. Adjourn

Registration Information Word

Conference Location
Federal Reserve Bank of New York
33 Liberty Street
New York, NY

Conference Organizers
Patrick Bolton, Princeton University
Hamid Mehran, Federal Reserve Bank of New York

Contact
Please address any questions to:

Hamid Mehran
Federal Reserve Bank of New York
Research
33 Liberty Street
New York, NY 10045
Hamid.Mehran@ny.frb.org