> Skip to content
FEATURED:
Sign In
  • Latest
  • Advice
  • Opinion
  • Webinars
  • Data
  • Grants
  • Magazine
  • Store
    • Featured Products
    • Data
    • Reports
    • Collections
    • Back Issues
    • Webinars
    • Featured Products
    • Data
    • Reports
    • Collections
    • Back Issues
    • Webinars
  • Jobs
    • Find a Job
    • Post a Job
    • Find a Job
    • Post a Job
Sign In
  • Latest
  • Advice
  • Opinion
  • Webinars
  • Data
  • Grants
  • Magazine
  • Store
    • Featured Products
    • Data
    • Reports
    • Collections
    • Back Issues
    • Webinars
    • Featured Products
    • Data
    • Reports
    • Collections
    • Back Issues
    • Webinars
  • Jobs
    • Find a Job
    • Post a Job
    • Find a Job
    • Post a Job
  • Latest
  • Advice
  • Opinion
  • Webinars
  • Data
  • Grants
  • Magazine
  • Store
    • Featured Products
    • Data
    • Reports
    • Collections
    • Back Issues
    • Webinars
    • Featured Products
    • Data
    • Reports
    • Collections
    • Back Issues
    • Webinars
  • Jobs
    • Find a Job
    • Post a Job
    • Find a Job
    • Post a Job
Sign In
ADVERTISEMENT
Research
  • Twitter
  • LinkedIn
  • Show more sharing options
Share
  • Twitter
  • LinkedIn
  • Email
  • Facebook
  • Copy Link URLCopied!
  • Print

Transparency Boosts Donations, Even for Struggling Charities, Study Finds

By  Alex Daniels
February 12, 2019

The Theory

Watchdogs often try to goad nonprofits into providing greater financial transparency. But is opening the books really a winning strategy with donors — especially if the news isn’t good?

The Test

To find out, authors of a recent study examined data provided by GuideStar, which evaluates charities based on the depth of information they provide in areas like impact reports, fundraising expenses, and governance. The researchers examined more than 14,000 nonprofit profiles collected by GuideStar to see if the increased transparency led to more donations.

We’re sorry. Something went wrong.

We are unable to fully display the content of this page.

The most likely cause of this is a content blocker on your computer or network. Please make sure your computer, VPN, or network allows javascript and allows content to be delivered from v144.philanthropy.com and chronicle.blueconic.net.

Once javascript and access to those URLs are allowed, please refresh this page. You may then be asked to log in, create an account if you don't already have one, or subscribe.

If you continue to experience issues, contact us at 202-466-1032 or help@chronicle.com

The Theory

Watchdogs often try to goad nonprofits into providing greater financial transparency. But is opening the books really a winning strategy with donors — especially if the news isn’t good?

The Test

To find out, authors of a recent study examined data provided by GuideStar, which evaluates charities based on the depth of information they provide in areas like impact reports, fundraising expenses, and governance. The researchers examined more than 14,000 nonprofit profiles collected by GuideStar to see if the increased transparency led to more donations.

The Results

ADVERTISEMENT

About 16 percent of the researchers’ sample earned one of GuideStar’s three seals of approval — bronze, silver, or gold. (An additional platinum level has been added since their investigation.) In the year following their initial rating, charities received 53 percent more in donations. Increases in transparency, like going from a bronze to a silver rating, resulted in a 26 percent increase.

Dig Deeper

The researchers found that well-run, professional organizations tended to see the biggest increases in donations when they provided more information. However, even organizations that performed poorly saw an increase when they opened up. Erica Harris, one of the study’s authors, says that’s something to keep in mind for charities that are struggling with their finances or mopping up after a fraud scandal. “They have this idea that they should keep it under wraps,” she says. “But if they get out in front of the fraud, they can mitigate some of the downturn in donations.”

Find it

“Determinants and Consequences of Nonprofit Transparency,” by Erica Harris and Daniel Neely, was published in the Journal of Accounting, Auditing & Finance in December 2018.

ADVERTISEMENT

A version of this article appeared in the February 12, 2019, issue.
We welcome your thoughts and questions about this article. Please email the editors or submit a letter for publication.
Mass FundraisingResults and Reporting
Alex Daniels
Before joining the Chronicle in 2013, Alex covered Congress and national politics for the Arkansas Democrat-Gazette. He covered the 2008 and 2012 presidential campaigns and reported extensively about Walmart Stores for the Little Rock paper.
ADVERTISEMENT
ADVERTISEMENT

Related Content

  • Donors Want Board Action, Not a Lawsuit, When Fraud Occurs
  • Operating Expenses Are Not a Good Gauge of Efficiency, Researchers Say
  • Nonprofits Should Think Twice Before Offering Gifts in Exchange for Donations, Study Suggests
  • Explore
    • Latest Articles
    • Get Newsletters
    • Advice
    • Webinars
    • Data & Research
    • Magazine
    • Chronicle Store
    • Find a Job
    Explore
    • Latest Articles
    • Get Newsletters
    • Advice
    • Webinars
    • Data & Research
    • Magazine
    • Chronicle Store
    • Find a Job
  • The Chronicle
    • About Us
    • Work at the Chronicle
    • User Agreement
    • Privacy Policy
    • California Privacy Policy
    • Gift-Acceptance Policy
    • Site Map
    • DEI Commitment Statement
    The Chronicle
    • About Us
    • Work at the Chronicle
    • User Agreement
    • Privacy Policy
    • California Privacy Policy
    • Gift-Acceptance Policy
    • Site Map
    • DEI Commitment Statement
  • Customer Assistance
    • Contact Us
    • Advertise With Us
    • Post a Job
    • Reprints & Permissions
    • Do Not Sell My Personal Information
    Customer Assistance
    • Contact Us
    • Advertise With Us
    • Post a Job
    • Reprints & Permissions
    • Do Not Sell My Personal Information
  • Subscribe
    • Individual Subscriptions
    • Organizational Subscriptions
    • Subscription & Account FAQ
    • Manage Newsletters
    • Manage Your Account
    Subscribe
    • Individual Subscriptions
    • Organizational Subscriptions
    • Subscription & Account FAQ
    • Manage Newsletters
    • Manage Your Account
1255 23rd Street, N.W. Washington, D.C. 20037
© 2023 The Chronicle of Philanthropy
  • twitter
  • youtube
  • pinterest
  • facebook
  • linkedin