Relationships between financial transparency, trust, and performance: an examination of donors’ perceptions

Ushi Ghoorah (), Edward Mariyani-Squire and Sabreena Zoha Amin
Additional contact information
Ushi Ghoorah: Locked Bag 1797
Edward Mariyani-Squire: Locked Bag 1797
Sabreena Zoha Amin: Locked Bag 1797

Palgrave Communications, 2025, vol. 12, issue 1, 1-11

Abstract: Abstract To better understand donors’ decisions within the nonprofit context, it is important to empirically attend to their perceptions of nonprofits. Drawing upon extant literature, a parsimonious conceptual model of donor perceptions is developed. Hypotheses derived from the model are empirically tested by means of structural equation modelling using 2017 survey data from 400 usable responses. The study finds positive associations between (1) perceptions of financial transparency and perceived performance, (2) perceived financial transparency and donor trust, and (3) donor trust and perceived performance. Different explanatory mechanisms are suggested to account for these findings. (1) could be explained by an ‘informational’ mechanism, whereas (2) and (3) could be explained by a ‘performative’ mechanism. The focus on donor perceptions has important implications for regulators when considering the assessment of nonprofit disclosure practices. The findings would also be valuable to nonprofits in developing strategies aimed at legitimising their operations by improving perceptions of their performance and trust in their ‘organisational brand’. By examining subjective perceptions of transparency and performance, this paper extends the nonprofit literature on donors’ perceptions, and adds a fresh perspective to the growing body of work on nonprofit transparency.

Date: 2025
References: Add references at CitEc
Citations:

Downloads: (external link)
http://link.springer.com/10.1057/s41599-025-04640-2 Abstract (text/html)
Access to full text is restricted to subscribers.

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:pal:palcom:v:12:y:2025:i:1:d:10.1057_s41599-025-04640-2

Ordering information: This journal article can be ordered from
https://www.nature.com/palcomms/about

DOI: 10.1057/s41599-025-04640-2

Access Statistics for this article

More articles in Palgrave Communications from Palgrave Macmillan
Bibliographic data for series maintained by Sonal Shukla () and Springer Nature Abstracting and Indexing ().