Information in the Nonprofit Sector: What do Donors Value?

• In Event: Growing Gifts for Good: Examining Fundraising in the Nonprofit Sector

Abstract

This paper studies donor responses to information on nonprofit operations. Using an event study design, we leverage the rollout of Charity Navigator’s new Encompass Rating System, which provides information on a charity’s finances, impact, organizational culture and leadership. We find that, for the most part, donors ignore more nuanced information on a charity’s operations. However, at particularly salient times of year for charitable giving, such as GivingTuesday, information on charity impact and effectiveness is most highly valued. A 10 percent increase in an organization’s overall rating caused by the addition of impact information leads to a five percent increase in donations around GivingTuesday. These results are important for understanding donor decision-making and preferences, and can help shape charities’ long-term strategies.

Author

• Teresa D Harrison, Drexel University
  Presenting Author