Exploring the Relationship of Hidden Costs in the Third Sector

Abstract

This research aimed to investigate the relationship between the adoption of hidden cost proxies and the perception of efficiency in third-sector entities awarded the Best NGOs Award 2023. The research is exploratory with a quantitative approach. A total of 100 organizations were contacted, but 30 responded to the questionnaire, and the data were collected through a survey. The results provide evidence of significant associations between cost management practices and hidden cost proxies, demonstrating the operational efficiency of the entities. The analyses reveal that the number of professionals employed is correlated with compliance with tax regulations, indicating that organizations with larger teams tend to be more diligent in fulfilling their tax obligations. Furthermore, the study reveals that organizations with larger teams tend to be more diligent in their fiscal obligations. Investments in discrimination prevention, combating child labor, and promoting employee health have been shown to improve operational efficiency and reduce hidden costs. The results of the Spearman correlation test, with a 95% confidence level, indicated a relationship between cost management practices and hidden cost proxies.