Does meeting BBB accountability standards affect charitable giving? A study of New York Metropolitan area charities, replicated by a US national sample

Abstract

Nonprofit organizations acquire resources from diverse sources, wherein donations play a significant role for many. To help donors and other source of public support make donative decisions, Better Business Bureaus under its Wise Giving Alliance conduct and publish review results of participating nonprofit organizations based on nationally developed criteria named as BBB STANDARDS FOR CHARITY ACCOUNTABILITY. This study assess the impact of meeting all BBB accountability criteria on the amount of public support received, using data from New York region charity organizations. The study result was replicated for validity by using an independent sample from key nonprofits from across the US in general. Multiple methods were used in data analysis, taking advantage of the data quality and availability. The research finds that participating in the accountability review program and meeting all the evaluative criteria is associated with increased public support, controlling for documented key covariates. The study is limited by its quantitative orientation and further studies to qualitatively investigate the detailed mechanism of the phenomena is recommended.

Using Certifications to Signal Trustworthiness and Reduce the Perceived Risk of Donors – An Exploratory Investigation into the Impact of Charity Labels

“…Sloan (2009) shows that positive ratings by the BBB Wise Giving Alliance have a significant effect on contributions received by charities (though "did not pass" ratings have not). The research by Chen (2009Chen ( , 2016 found, too, that meeting BBB standards has a positive effect on giving behavior and is associated with higher levels of public financial support. He thus recommends participating in assessment programs to increase fundraising revenues.…”