The Relationship Between Disclosure and Household Donations to Nonprofit Organizations in Australia

Abstract

Based on the signaling theory and its application in nonprofit organizations, this study examines the relationship between disclosure in nonprofits and ability to attract household donations. Based on 50 random Australian nonprofits, scores were assigned for fiduciary, financial, performance, and total disclosure. A significant correlation was observed between the extent of total household donations received and a change in marketing and fundraising spend. However, there was no significant relationship identified between total household donations and disclosure. As disclosure does not seem to be rewarded by household donors, this article discusses the potential for a national educational campaign to inform donors of the increasing accessibility of this type of information, the benefits of utilizing this type of information, and how best to use it.