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Reported Instances of Nonprofit Corruption: Do Donors Respond to Scandals in the Charitable Sector?

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  • Mark S. LeClair

    (Fairfield University)

Abstract

Corruption at charitable organizations is, if not growing, becoming more evident to the public. Highly visible scandals reduce confidence in nonprofits generally and may permanently reduce donations. Existing work on malfeasance in the nonprofit sector has analyzed the characteristics of charities where corruption has occurred. What has not been examined in the literature is whether scandals have impacted contributions as a whole. If donations are unaffected by corruption, then there is little incentive to support systemic reforms. This paper will explore the impact of visible corruption on the level of giving by individuals. An econometric model that incorporates the primary drivers of donations will be developed, including such factors as income, net worth and tax policy, coupled with personal attributes, such as religious affiliation. When measures of the magnitude of press coverage of corruption are added to the model, they test as significant, indicating publicized scandals are, in fact, suppressing donations. This analysis contributes to the literature on organizational reputation and its impact on performance.

Suggested Citation

  • Mark S. LeClair, 2019. "Reported Instances of Nonprofit Corruption: Do Donors Respond to Scandals in the Charitable Sector?," Corporate Reputation Review, Palgrave Macmillan, vol. 22(2), pages 39-47, May.
    • Handle: RePEc:pal:crepre:v:22:y:2019:i:2:d:10.1057_s41299-018-0056-5
    DOI: 10.1057/s41299-018-0056-5
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    References listed on IDEAS

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    1. Bakija, Jon & Heim, Bradley T., 2011. "How Does Charitable Giving Respond to Incentives and Income? New Estimates From Panel Data," National Tax Journal, National Tax Association;National Tax Journal, vol. 64(2), pages 615-650, June.
    2. Thomas Garrett & Russell Rhine, 2010. "Government growth and private contributions to charity," Public Choice, Springer, vol. 143(1), pages 103-120, April.
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    Cited by:

    1. Zachary Halberstam & James R. Hines Jr., 2023. "Quality-Aware Tax Incentives for Charitable Contributions," CESifo Working Paper Series 10250, CESifo.
    2. Lijun Yin & Ruzhen Mao & Zijun Ke, 2021. "Charity Misconduct on Public Health Issues Impairs Willingness to Offer Help," IJERPH, MDPI, vol. 18(24), pages 1-14, December.

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