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THE MAGAZINE OF FLORIDA INTERNATIONAL UNIVERSITY'S COLLEGE OF BUSINESS
 
Nonprofits may be Missing Out on Donations

Nonprofits may be Missing Out on Donations

By Cynthia Corzo

Nonprofit organizations featuring assurance seals on their websites provide greater trustworthiness for donors than their non-seal counterparts, yet few of these organizations have adopted the signal, potentially missing out on donor participation, according to a study by an FIU Business professor.

"The security seal is meant to act as a visual assurance for consumers," said Erica Harris, associate professor of accounting and one of the study's researchers. "It's a signal that the organization is legitimate, and that funds will go to the nonprofit cause."

Donors should be looking out for an assurance seal to be sure that donations are not misdirected. To potential donors, it also indicates that they need not worry about submitting credit card and other personal information.

"THE SECURITY SEAL IS MEANT TO ACT AS A VISUAL ASSURANCE FOR CONSUMERS."

Erica Harris

The researchers examined the individual online donation web pages of the 2,000 largest nonprofit organizations in the U.S. and verified whether a web assurance seal was displayed to donors prior to making a gift.

Published in the Summer 2020 issue of the Journal of Information Systems, the study found that a scant 263 organizations, representing 13.8% of the sample, invested in such seals. Harris described these numbers as surprising, expecting a higher presence of web seals on nonprofit organizations' websites.

In sharp contrast, nearly 100% of e-commerce sites have web seals, Harris noted. Their focus is to assure shoppers – concerned with protecting data plus avoiding phishing scams and malware – that their information is safe and secure. Every time you make a purchase, you see a web seal.

Harris' research also analyzes the impact of website seals on the amount of donor contributions received by charity organizations. The study found that nonprofit organizations displaying an assurance seal on their donations web page do, in fact, receive higher levels of donations. This finding provides important guidance for organizations going forward as they seek strategies for expanding donors' online contributions. However, when researchers investigated further, they also found that an assurance seal isn't a must-have for every organization.

"The largest nonprofits, those really well known, can forgo the seal given their established reputations in the charity marketplace," said Harris. "For mid-tier organizations not as well-known, the seal provides the most benefit by signaling credibility to donors."

This research was conducted by Harris with Joseph Canada of Rutgers University.