Does additional mandatory reporting alter charity or donor behavior? Examining the 2006 Pension Protection Act

Jonathan Oxley

Journal of Economic Behavior & Organization, 2022, vol. 200, issue C, 738-751

Abstract: Financial disclosure requirements are common accountability measures placed on publicly funded organizations. However, the impact of financial disclosure requirements on organizational structure or on financial contributors’ behavior is not well understood in the context of nonprofit organizations. I explore this question by analyzing mandatory Form 990-T disclosure included in the Pension Protection Act. This contributes to the understanding of organizational and financial contributor response to mandatory disclosure in an environment already requiring operation data disclosure. I use a difference-in-differences approach, comparing organizations filing a Form 990-T at least once in the three years prior to passage to those who did not. I find that one in four filing organizations create a subsidiary in the following two filing years. Subsidiary tax filings are not subject to disclosure, indicating that nonprofits can restructure their organizations in a manner allowing them to circumvent disclosure requirements. While charities alter their organizational structure, I find no evidence of net changes in donor behavior towards charities, as aggregate total contributions and government grants received do not change.

Keywords: Financial disclosure; Nonprofit organizations; Form 990-T; Taxable subsidiaries (search for similar items in EconPapers)
JEL-codes: D64 G38 H80 L30 M48 (search for similar items in EconPapers)
Date: 2022
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
http://www.sciencedirect.com/science/article/pii/S0167268122002086
Full text for ScienceDirect subscribers only

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:eee:jeborg:v:200:y:2022:i:c:p:738-751

DOI: 10.1016/j.jebo.2022.06.012

Access Statistics for this article

Journal of Economic Behavior & Organization is currently edited by Houser, D. and Puzzello, D.

More articles in Journal of Economic Behavior & Organization from Elsevier
Bibliographic data for series maintained by Catherine Liu ().