The Impact of Voluntarily Filing Form 990 on Donations, Government Grants, and Total Contributions
Wei Hsu & Brian P. McAllister
Abstract
We examine whether voluntary IRS Form 990 filers attract higher donations, government grants, and total contributions. We define voluntary 990 filers as charities eligible to file a Form 990EZ but instead choose to file a more exhaustive 990. The 990 provides incremental financial information, including disclosures about functional expense classifications for administrative and fundraising, charity governing bodies and governance policies, and whether a charity has engaged in an audit. Our strongest evidence shows that total contributions are almost three times higher for charities that choose to voluntarily file a 990 instead of a 990EZ. We also provide limited evidence that voluntary 990 filers are positively associated both with donations and grants as compared to those mandated to file a 990. Our findings are consistent with signaling theory and show that disclosing additional information beyond what is required increases transparency and offers benefits to charities. Data Availability: Data were collected from publicly available sources quoted in the text. JEL Classifications: L31.
1 citation
Evidence weight
Balanced mode · F 0.40 / M 0.15 / V 0.05 / R 0.40
| F · citation impact | 0.28 × 0.4 = 0.11 |
| M · momentum | 0.53 × 0.15 = 0.08 |
| V · venue signal | 0.50 × 0.05 = 0.03 |
| R · text relevance † | 0.50 × 0.4 = 0.20 |
† Text relevance is estimated at 0.50 on the detail page — for your query’s actual relevance score, open this paper from a search result.