Looking at the nonprofit accountability‐charitable donations relationship through the publicness lens

Abstract

AbstractThis study integrates the publicness theory and the benefits theory of nonprofit finance to examine how nonprofits' financial and non‐financial accountability criteria relate to the private charitable contributions they receive. The analysis of the National Center for Charitable Statistics' IRS Statistics of Income Sample Files 2008–2012 and Nonprofit IRS E‐filers 2010–2017 reveals that the relationships between accountability criteria and private donations vary significantly depending on the nonprofits' funding structure and service type. In particular, financial ratios are more strongly associated with charitable contributions with more commercially funded nonprofits, while contributions to organizations relying more on noncommercial revenues are better explained by the adoption of good governance policies. The findings also reveal differences depending on the nature of nonprofit services, as financial ratios are more strongly associated with donations to organizations providing private benefits than with donations to nonprofits providing mixed or public benefits.