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.
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