The cost of noise: noise pollution and nonprofit expenses

Purpose - This study examines the financial impacts of noise pollution on nonprofit organizations, focusing on how increased noise levels influence total spending and expenditures in the fundraising, administrative and program categories. By exploring these effects, the study aims to learn whether and how nonprofits are reallocating resources to address the adverse consequences of environmental noise. Design/methodology/approach - Utilizing IRS Form 990 data for 149,595 US nonprofits from 2020, this study employs OLS regressions and robustness tests, including instrumental variables and entropy balancing, to analyze the impact of noise pollution, measured using data from the National Transportation Noise Exposure Map. The research examines total spending as well as spending patterns across three main functional areas: fundraising, administration, and programs. Findings - The findings suggest noise pollution has an adverse impact on overall spending as well as fundraising expenses, seemingly at the expense of core program-related functions. Nonprofits in noisier areas appear to require more fundraising investment to counteract donor aversion caused by environmental stressors, leading to reduced capacity for spending on programs. Originality/value - This study contributes to the literature by examining the role of environmental factors, and specifically noise pollution, in nonprofit financial health. Using a new dataset on census tract-level ambient noise, we are able, for the first time, to empirically examine the organizational impacts of noise pollution across geographic regions. Our study highlights the importance of considering environmental conditions in financial planning for nonprofits, offering practical implications for nonprofit managers and policymakers to develop strategies that mitigate the financial strain imposed by noise pollution.