Balance sheet insolvency and contribution revenue in public charities

• 成果类型: Article
• 署名作者: Homonoff, Tatiana; Spreen, Thomas Luke; St Clair, Travis
• 署名单位: New York University; University System of Maryland; University of Maryland College Park; National Bureau of Economic Research
• 刊物名称: JOURNAL OF PUBLIC ECONOMICS
• ISSN/ISSBN: 0047-2727
• DOI: 10.1016/j.jpubeco.2020.104177
• 发表日期: 2020
• 关键词: Bunching; Charitable giving; Nonprofit finance

摘要

Using Form 990 data reported by public charities, we document significant bunching of nonprofits at near-zero net assets, the threshold for insolvency. Bunching occurs despite the fact that creditors cannot force insolvent nonprofits into involuntary bankruptcy. We show that the extent of bunching is greater among organizations that rely more heavily on contribution revenue, and that by inflating their net assets, bunching organizations are able to increase their contribution revenue relative to firms that report negative net assets. Charitable donors appear to use the net assets threshold as a heuristic for a charity's financial health; nonprofit managers, in turn, respond to the preferences of their donors. (C) 2020 Elsevier B.V. All rights reserved.