The Impact of Financial Information and Voluntary Disclosures on Contributions to Not-for-Profit Organizations: A Field-Based Experiment

29 Pages Posted: 20 May 2003

See all articles by Linda M. Parsons

Linda M. Parsons

University of Alabama - Culverhouse School of Accountancy

Abstract

The relationship between the management of and donors to a not-for-profit firm is an example of a situation with information asymmetry. This study examines whether it is possible for nonprofit managers to increase donations received if they provide signals to convey the efficiency and effectiveness of their operations.

A field-based experiment uses a real 501(c)3 organization to investigate whether accounting information reduces perceived uncertainty about nonprofit operations. Potential donors were sent, via a direct mail campaign, fundraising appeals containing varying amounts of financial and nonfinancial information in order to determine whether individual donors 1) are more likely to contribute and 2) donate greater amounts when accounting information is provided.

A logistic regression provides evidence that some donors use financial accounting information when making a donation decision. Donors who had previously contributed to the organizations are more likely to give when financial efficiency measures are provided to them directly.

Keywords: voluntary disclosures, service efforts and accomplishments, not-for-profit, field experiment

JEL Classification: M41, M45, M48

Suggested Citation

Parsons, Linda M., The Impact of Financial Information and Voluntary Disclosures on Contributions to Not-for-Profit Organizations: A Field-Based Experiment. Available at SSRN: https://ssrn.com/abstract=406760 or http://dx.doi.org/10.2139/ssrn.406760

Linda M. Parsons (Contact Author)

University of Alabama - Culverhouse School of Accountancy ( email )

101 Paul W. Bryant Dr.
Box 870382
Tuscaloosa, AL 35487
United States

Do you have a job opening that you would like to promote on SSRN?

Paper statistics

Downloads
934
Abstract Views
6,066
rank
30,969
PlumX Metrics