The Determinants of Voluntary Financial Disclosure by Nonprofit Organizations

Nonprofit and Voluntary Sector Quarterly, Vol. 41, pp. 1052-1071, 2012. doi: 10.1177/0899764011427597

36 Pages Posted: 5 Jun 2012 Last revised: 12 Dec 2012

See all articles by Gregory D. Saxton

Gregory D. Saxton

Schulich School of Business, York University

Jenn-Shyong Kuo

National Taipei University

Yi-Cheng Ho

National Cheng-Chi University, Department of Public Finance

Date Written: November 14, 2011

Abstract

Encouraging organizations to be more open has been a key issue in contemporary debates over nonprofit accountability. However, our understanding of what motivates organizations to the disclosure decision is weak. We aim to enhance our understanding of this critical issue by developing and testing a model of the determinants of voluntary disclosure decision making, using data gathered on the population of not-for-profit medical institutions in Taiwan during a period where the government encouraged — but did not require — disclosure on a centralized website. As a result, we are able to conduct a “natural experiment” of the voluntary disclosure behavior of an important population of non-donor-dependent organizations. We find voluntary disclosure is more likely in organizations that are smaller, have lower debt/asset ratios, and are run by larger boards with more inside members. Our data suggest that, from a policy perspective, voluntary disclosure regimes are not an especially effective means of promoting public accountability.

Keywords: financial accountability, voluntary disclosure, financial reporting, web disclosure, not-for-profit medical institutions, nonprofit organizations, electronic disclosure, organizational communication, internet financial reporting

JEL Classification: D82, D83, L31, M41, O33, H83

Suggested Citation

Saxton, Gregory D. and Kuo, Jenn-Shyong and Ho, Yi-Cheng, The Determinants of Voluntary Financial Disclosure by Nonprofit Organizations (November 14, 2011). Nonprofit and Voluntary Sector Quarterly, Vol. 41, pp. 1052-1071, 2012. doi: 10.1177/0899764011427597. Available at SSRN: https://ssrn.com/abstract=2069655

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

Jenn-Shyong Kuo

National Taipei University ( email )

Dept. of Finance
Taipei, Taiwan 100
Taiwan

Yi-Cheng Ho

National Cheng-Chi University, Department of Public Finance ( email )

No. 64, Chih-Nan Road
Section 2
Wenshan, Taipei, 11623
Taiwan

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