This paper adopts an internet-based experiment to investigate whether and how individual donors use nonprofit organizations' financial and nonfinancial information when making their donation decisions. Using undergraduate students in the United States (US) to proxy for individual donors, our results indicate that individual donors are more likely to acquire nonfinancial information, such as nonprofit organizations' goals, outcomes, programs and missions, than financial information. Donors integrate nonfinancial information into their decisions as their actual donations are significantly correlated with such information. Our results also indicate that while individual donors acquire financial efficiency measures, including the program expense ratio and fundraising expense ratio, they do not seem to integrate such information into their decisions as their actual donations are not significantly correlated with the efficiency information. This study contributes to the nonprofit literature and research domain focusing on charitable giving and donor preferences.
SYNOPSIS
This study examines whether and how a nonprofit organization's financial efficiency and its solicitation type—namely, whether it allows donors the ability to restrict contributions to their preferred choices—influence individual donations. We find that a nonprofit organization's financial efficiency indirectly influences individual donations through its effect on donors' confidence. We also find that a nonprofit organization receives significantly more donations when it allows donors to restrict donations to their preferred choices than when it does not. This positive effect is greater when the organization reports low efficiency than when it reports high efficiency. Thus, allowing the restriction of donations not only influences individual donations directly, but also compensates for the effect of low efficiency on donations.
<p class="MsoNormal" style="text-align: justify; margin: 0in 0.5in 0pt; mso-pagination: none;"><em style="mso-bidi-font-style: normal;"><span style="font-size: 10pt;"><span style="font-family: Times New Roman;">In this paper, I describe an assignment designed to give students an intermediate level of understanding of the causes of the crisis using online educational resources widely available on the internet.<span style="mso-spacerun: yes;"> </span>I implemented the assignment in an undergraduate intermediate accounting course.<span style="mso-spacerun: yes;"> </span>Feedback from students indicate the assignment enhanced their learning of basic financial literacy concepts, encouraged them to make links between significant economic events and accounting concepts, and increased their confidence in their ability to learn difficult concepts on their own.<span style="mso-spacerun: yes;"> </span></span></span></em></p>
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