The decision to advertise nonprofit accreditation status

ABSTRACT

Nonprofits seek accreditation to bolster their reputation and signal their worthiness to funders. The Better Business Bureau accredits nonprofits who pass 20 standards of accountability. Accredited organizations have the option to pay for the right to advertise their accredited status. At issue is why some organizations pay to advertise and other organizations do not. Utilizing a sample of 495 nonprofit organizations accredited by the Better Business Bureau, we find that nonprofits that pay to advertise the seal are larger, more profitable, have higher visibility, and are more likely to hire professional fundraisers. The results should be of interest to stakeholders and fundraisers interested in the adoption of methods to signal the accountability of nonprofit organizations.

KEYWORDS:

• Accreditation
• Better Business Bureau
• charity
• nonprofit
• signaling