Description/Abstract
Nonprofit organizations depend on donations to fulfill their missions, but donors choosing among 1.8 million U.S. public charities often lack the time or capacity to evaluate which organizations are actually performing well. This brief summarizes findings from a study that used a five-year panel dataset of over one million nonprofit-year records from GuideStar (2014–2018) to examine how transparency seal ratings affect donation behavior. The author finds that having any GuideStar seal increases donations by about 7% compared to having no seal, and that platinum-rated nonprofits receive 34% more in donations than unrated organizations, regardless of actual organizational quality. Donors do not penalize poorly performing nonprofits that hold ratings, suggesting that many use rating hierarchies as mental shortcuts rather than verified performance signals.
Document Type
Policy Brief
Date
8-26-2026
Keywords
Nonprofits, third-party rating, heuristics, salience
Language
English
Series
Policy Briefs Series
Acknowledgements
This brief was drafted with the assistance of Claude (Anthropic) to summarize and synthesize the peer-reviewed article. All content was reviewed and verified by Alyssa Kirk and the brief author for accuracy and appropriate interpretation of the original article. The author thanks Alyssa Kirk for additional edits on this brief.
Disciplines
Behavioral Economics | Nonprofit Studies | Public Affairs, Public Policy and Public Administration | Public Policy
Recommended Citation
Haque, Ashraf. (2026). Do Nonprofit Ratings Help Donors Make Better Decisions? Center for Policy Research. Policy Brief #28. Accessed at: https://surface.syr.edu/cpr/536.
Creative Commons License
This work is licensed under a Creative Commons Attribution 4.0 International License.
