TY - JOUR
T1 - The impact of online financial disclosure and donations in nonprofits
AU - Blouin, Marie C.
AU - Lee, Roderick L.
AU - Erickson, G. Scott
N1 - Publisher Copyright:
© 2018, © 2018 Taylor & Francis.
PY - 2018/7/3
Y1 - 2018/7/3
N2 - Decreased public confidence and trust in the nonprofit sector has fueled increased calls for transparency. In response, federal regulators and watchdog organizations have recommended that nonprofits voluntarily disclose their financial information on their own public websites. Despite the potential benefits of enhanced public confidence and trust, improved donor decision making, and increased donations, many nonprofit organizations have not adopted the recommended disclosure practices. We investigate the disclosure practices of 3,217 nonprofits and find that voluntary web disclosure of the IRS Form 990 is strongly correlated to donations, independent of other variables such as age, size, and fundraising expenditures. Further, fundraising is also clearly related to the performance indicators shown in the 990 disclosures, particularly the program ratio of program expenditures to total expenditures. This is true on a general level and when specifically compared to other nonprofits within particular sectors. As a result, nonprofits should seriously consider voluntarily posting their Form 990 results on their websites when it reflects favorably and strive to improve their financial performance if online disclosure would reflect poorly on the organization.
AB - Decreased public confidence and trust in the nonprofit sector has fueled increased calls for transparency. In response, federal regulators and watchdog organizations have recommended that nonprofits voluntarily disclose their financial information on their own public websites. Despite the potential benefits of enhanced public confidence and trust, improved donor decision making, and increased donations, many nonprofit organizations have not adopted the recommended disclosure practices. We investigate the disclosure practices of 3,217 nonprofits and find that voluntary web disclosure of the IRS Form 990 is strongly correlated to donations, independent of other variables such as age, size, and fundraising expenditures. Further, fundraising is also clearly related to the performance indicators shown in the 990 disclosures, particularly the program ratio of program expenditures to total expenditures. This is true on a general level and when specifically compared to other nonprofits within particular sectors. As a result, nonprofits should seriously consider voluntarily posting their Form 990 results on their websites when it reflects favorably and strive to improve their financial performance if online disclosure would reflect poorly on the organization.
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U2 - 10.1080/10495142.2018.1452819
DO - 10.1080/10495142.2018.1452819
M3 - Article
AN - SCOPUS:85044733374
SN - 1049-5142
VL - 30
SP - 251
EP - 266
JO - Journal of Nonprofit and Public Sector Marketing
JF - Journal of Nonprofit and Public Sector Marketing
IS - 3
ER -