The Role of Related Party Fundraising on the Relation Between Reporting Quality and Donations

• In Event: 1.01 Nonprofit Research Concurrent Session: Donation Decisions

Abstract

Prior research shows that donors discount program ratios when a nonprofit organization reports zero fundraising expense. In this paper, we show that a plausible reason for organizations reporting zero fundraising expenses is that a related party conducts fundraising on the organization’s behalf. Consistent with this interpretation, we find that nonprofits reporting a related fundraising entity are more likely to report zero fundraising expenses. We also find that related party fundraising moderates the negative impact of reporting zero fundraising expenses on donations.

Authors

• Steven Balsam, Temple University

• Erica Harris, Florida International University

• Paul Anthony Wong, University of California-Davis