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Nonprofit behavior altered by monetary donations: evidence from the U.S. hospice industry

Author

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  • Miao Guo

    (Hunan University)

  • Lei Guo

    (University of Chinese Academy of Social Science)

  • Yang Li

    (The University of Nottingham Ningbo China)

Abstract

This study investigates whether reliance on monetary donations alters nonprofit firms’ behaviors. Specifically, in the hospice industry, a shorter patients’ length of stay (LOS) speeds up overall patient turnover, allowing a hospice to serve more patients and expand its donation network. We measure hospices’ donation reliance using the donation–revenue ratio, which indicates the importance of donations for revenue structure. By exploiting the supply shifter of donation, we adopt the number of donors as an instrument to control for the potential endogeneity issue. Our result suggests that a one-percentage-point increase in the donation–revenue ratio decreases patient LOS by 8%. Hospices that are more reliant on donations serve patients diagnosed with diseases that have shorter life expectancies to achieve a lower average LOS of all patients’ stay. Overall, we find that monetary donations alter the behavior of nonprofit organizations.

Suggested Citation

  • Miao Guo & Lei Guo & Yang Li, 2024. "Nonprofit behavior altered by monetary donations: evidence from the U.S. hospice industry," The European Journal of Health Economics, Springer;Deutsche Gesellschaft für Gesundheitsökonomie (DGGÖ), vol. 25(2), pages 207-220, March.
    • Handle: RePEc:spr:eujhec:v:25:y:2024:i:2:d:10.1007_s10198-023-01571-0
    DOI: 10.1007/s10198-023-01571-0
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    References listed on IDEAS

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    Cited by:

    1. Christopher M. Starkey & Soode Vaezinejad & Dara Schniederjans, 2025. "Optimizing donations for End-of-life healthcare: investments in service diversity initiatives," Service Business, Springer;Pan-Pacific Business Association, vol. 19(1), pages 1-28, March.

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    More about this item

    Keywords

    Nonprofit; Hospice; Monetary donation; Length of stay; Financial incentive;
    All these keywords.

    JEL classification:

    • L2 - Industrial Organization - - Firm Objectives, Organization, and Behavior
    • L3 - Industrial Organization - - Nonprofit Organizations and Public Enterprise
    • I1 - Health, Education, and Welfare - - Health

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