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Do Charity Ratings Matter?


Author Info

  • Vidhi Chhaochharia

    (Department of Finance, School of Business, University of Miami)

  • Suman Ghosh

    (Department of Economics, College of Business, Florida Atlantic University)

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    This paper investigates whether donor contributions to charities responds to the information incorporated in charity ratings. Using charity ratings data from 1999-2004, we find that ratings do have a significant effect on contributions received. We find that charities that have the lowest rating have 16 % less contributions as compared to charities with the highest rating. In addition we find that charities in turn react to lower ratings by increasing their fundraising expenditures. Our results suggest that ratings do have an effect in reducing the asymmetry of information that exists amongst donors and the charities.

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    Bibliographic Info

    Paper provided by Department of Economics, College of Business, Florida Atlantic University in its series Working Papers with number 08001.

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    Length: 24 pages
    Date of creation: Feb 2008
    Date of revision:
    Handle: RePEc:fal:wpaper:08001

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    Cited by:
    1. Figlio, David N. & Kenny, Lawrence W., 2009. "Public sector performance measurement and stakeholder support," Journal of Public Economics, Elsevier, vol. 93(9-10), pages 1069-1077, October.


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