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The impact of sanctioning in the nonprofit sector

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  • Mayo, Jennifer

Abstract

This paper studies charity responses to alleged or confirmed misconduct. Using advisory notices published by Charity Navigator, I find that charities take steps to improve and change following these events, especially when misconduct is severe, or attracts more media attention. On average, the publication of an advisory prompts organizations to increase their program spending by over 20 percent in the years following a scandal. This response is not driven by the withdrawal of donor support, but instead could be due to concerns over long-term reputational damage. These findings help to quantify the value of a crucial accountability tool in the nonprofit sector.

Suggested Citation

  • Mayo, Jennifer, 2025. "The impact of sanctioning in the nonprofit sector," Journal of Economic Behavior & Organization, Elsevier, vol. 238(C).
    • Handle: RePEc:eee:jeborg:v:238:y:2025:i:c:s0167268125003178
    DOI: 10.1016/j.jebo.2025.107198
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    More about this item

    Keywords

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    JEL classification:

    • L31 - Industrial Organization - - Nonprofit Organizations and Public Enterprise - - - Nonprofit Institutions; NGOs; Social Entrepreneurship
    • D64 - Microeconomics - - Welfare Economics - - - Altruism; Philanthropy; Intergenerational Transfers
    • L82 - Industrial Organization - - Industry Studies: Services - - - Entertainment; Media

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