Executive Compensation Incentive And Performance Improvement Of NPO

Charity organizations are an important subject of modern philanthropy.To develop philanthropy in the new era,it is necessary to further cultivate and develop a number of modern charitable organizations with good social reputation,strong professional ability and improved governance structure.As an important part of charitable organizations in China,charitable foundations are guided by social needs,integrate social charitable forces and resources,and play a positive role in helping the poor and serving the society.However,China’s charitable foundations are still facing many challenges in the collection and supervision of charitable funds.How to enhance the foundation’s ability to serve the society and increase the foundation’s performance are receiving increasing attention.The performance of charitable foundations is determined by the donation income,which is the decisive factor affecting the charitable ability of foundations.Based on this,this thesis explores the influencing factors of foundation performance from the perspective of internal governance of foundations.Firstly,the thesis expounds the research background,problems and significance,and introduces the innovation of the thesis;The second part defines the concepts of foundation performance,fund-raising,public funds and non-public funds;The third part reviews the relevant literature and research progress of charitable organizations at home and abroad;The fourth part discusses the theoretical basis of the article and puts forward assumptions;The fifth and sixth chapters are empirical regression and result analysis;The seventh part has carried on the robustness test to the article research result;The last part puts forward conclusions and policy recommendations.Taking the data of the annual work report of China’s charitable foundations from 2016 to2021 as the research sample,this article explores the relationship between the executive compensation incentive of China’s charitable foundations and the improvement of foundation performance.At the same time,through the intermediary effect model,it analyzes the role of fund-raising expenses in the process of executive compensation incentive affecting foundation performance,and analyzes the differences in executive compensation incentive effects between public and non-public foundations through heterogeneity.The results show that the executive compensation incentive of charitable foundations in China has a significant positive impact on the foundation performance,and this effect is more obvious in public funds;At the same time,the improvement of executive compensation incentive on foundation performance is transmitted through the intermediary utility of fund-raising costs.In terms of control variables,the level of operating cash flow,the rate of return on investment and the number of managers of the foundation are significantly positively correlated with the performance level of the foundation,while the asset liability ratio and the foundation’s establishment years are significantly negatively correlated with the foundation’s performance.In addition,the article also finds that the effect of external salary gap incentive is obviously better than that of internal salary gap incentive.The incentive effect brought by increasing the external salary gap of senior executives is relatively stronger and is also applicable in non-public foundations.By analyzing the correlation between executive compensation incentive and foundation performance and the intermediary effect of fund-raising expenses,this thesis provides theoretical support and policy recommendations for China’s charitable foundations to develop a reasonable compensation mechanism and reasonably arrange fund-raising activities to improve performance.