Web Disclosure and the Market for Charitable Contributions

40 Pages Posted: 21 Aug 2011 Last revised: 6 Dec 2014

See all articles by Gregory D. Saxton

Gregory D. Saxton

Schulich School of Business, York University

Daniel Neely

University of Wisconsin - Milwaukee

Chao Guo

Penn School of Social Policy & Practice, University of Pennsylvania

Date Written: January 2, 2014

Abstract

Nonprofit organizations face intense competition in the market for charitable contributions. Increasingly, donation decisions are made online, and organizations have responded by implementing substantive Internet disclosure and reporting regimes. We posit here that the voluntary disclosure of financial and performance information inherent in these regimes provides additional relevant information to a broad array of market participants, and thus has a positive impact on the receipt of charitable contributions. We test our hypotheses on a random sample of 400 US nonprofit organizations by building on the well established economic model of giving (Weisbrod and Dominguez, 1986), in which donations serve as the proxy for demand. Our central research question is thus: Are donors willing to “pay” for Web disclosure? Results indicate a positive relationship between the level of charitable contributions and the amount of disclosure provided by an organization on its website; however, performance and annual report disclosure are more important than financial disclosure, and performance disclosure has the biggest impact in organizations that are less reliant on donations.

Keywords: voluntary disclosure, Internet financial reporting, nonprofit organizations, donations, charitable contributions, non-financial disclosure, performance disclosure

JEL Classification: D80, L31, M41, O33

Suggested Citation

Saxton, Gregory D. and Neely, Daniel and Guo, Chao, Web Disclosure and the Market for Charitable Contributions (January 2, 2014). Journal of Accounting and Public Policy, Vol. 33, 2014. Available at SSRN: https://ssrn.com/abstract=1912966 or http://dx.doi.org/10.2139/ssrn.1912966

Gregory D. Saxton (Contact Author)

Schulich School of Business, York University ( email )

4700 Keele Street
Toronto, Ontario M3J 1P3
Canada

HOME PAGE: http://social-metrics.org

Daniel Neely

University of Wisconsin - Milwaukee ( email )

Bolton Hall 802
3210 N. Maryland Ave.
Milwaukee, WI 53211
United States

Chao Guo

Penn School of Social Policy & Practice, University of Pennsylvania ( email )

Philadelphia, PA 19104-6214
United States

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