Elena Kennedy examines compensation strategies in entrepreneurial nonprofits

The assistant professor of entrepreneurship's co-authored research has been published in the Journal of Business Venturing.

Elena Kennedy, assistant professor of entrepreneurship in the Martha and Spencer Love School of Business, examines how shifting resource dependencies influence compensation strategy during commercial transitions within entrepreneurial nonprofits in the journal article, “A total eclipse of the heart: compensation strategies in entrepreneurial nonprofits.”

headshot of Elena Kennedy
Assistant Professor of Entrepreneurship Elena Kennedy

The article, co-authored by Abhisekh Ghosh Moulick, University of Oklahoma, Kostas Alexiou, University of Tampa, and Denise Linda Parris, University of Oklahoma, appears in Volume 35, Issue 4 of the Journal of Business Venturing.

Analyzing a longitudinal sample of 4,732 organizations, the co-authors show how compensation strategies shift non-linearly as nonprofit organizations (NPOs) transition from contributed resource dependence to market-based resource dependence. They found wages are suppressed and there is a higher reliance on part-time labor as arts nonprofits shift from donations to earned income. It isn’t until nonprofit budgets are overwhelmingly funded by earned income that wages for employees improve.

In the executive summary, the co-authors write, “Our findings raise significant questions within both the nonprofit management and social entrepreneurship literature streams relating to the central purpose of NPOs and social purpose organizations and their responsibilities to all their stakeholders—employees included. Much of the research and discussion on entrepreneurial NPOs (and social entrepreneurship) has focused on their role within communities, relationship with funders, and efficacy.

“Less attention has been paid to the impact commercialization has on employees, which represent the third-largest sector of workers within the US labor force (Salamon, 2018). Our research offers insights into this important topic and the way employee commitment to mission has been leveraged to shift risk away from entrepreneurial exploration within NPOs. We hope that our findings spark conversation among researchers, NPO managers, and policymakers about the responsibilities NPOs have to their employees as they court market opportunities.”

The Journal of Business Venturing publishes entrepreneurship research from a variety of disciplines, including economics, psychology and sociology, and contexts, such as international and sustainability (environmental and social).

Kennedy joined Elon in 2016 after completing her doctorate in organizations and social change from the University of Massachusetts-Boston. Her research focuses on the strategic decision making of social entrepreneurs.