Antecedents and Consequence of Donors' Trust in Nonprofit Organizations: Effect of Organization Efficiency and Contribution Type

Abstract:     
Donors are becoming increasingly concerned about the ability of nonprofit organizations to efficiently use their contributions. Thus, when deciding whether and how much to donate, donors need a certain level of trust in a nonprofit organization. Based on the literature on trust, we predicted donors to develop trust in a nonprofit organization's use of contributions by observing a nonprofit organization's efficiency information. Especially, donors were expected to develop higher trust when the organization's efficiency was high than when the organization's efficiency was low. Also, we predicted donors to develop higher trust when they were asked to make restricted contributions than whey they were not asked to restrict their contributions. Furthermore, trust in a nonprofit organization was expected to positively affect donors' actual cash donations. To test these predictions, we conducted a 2 (Efficiency: Low vs. High) x 2 (Contribution Type: Unrestricted contribution vs. Restricted contribution) experiment. The results of experiments provide support to our predictions. Implications to policymakers, researchers, nonprofit organizations and individual donors were discussed.

Keywords: Donor Trust, Nonprofit Organization Efficiency, Restricted Contributions

working papers series