When Financial Information Meets Religion: Charitable-Giving Behavior in Taiwan

By Su, Hiewu; Chou, Tungshan et al. | Social Behavior and Personality: an international journal, September 2011 | Go to article overview

When Financial Information Meets Religion: Charitable-Giving Behavior in Taiwan


Su, Hiewu, Chou, Tungshan, Osborne, Peter G., Social Behavior and Personality: an international journal


Taiwanese society has many nonprofit charitable organizations (NPCO) that deliver a wide range of humanitarian services to residents. These NPCO rely mainly on the generosity of the public to fund their services. As a government incentive to encourage the general public to give to good causes, Taiwanese government taxation codes provide incentives via tax deductions for donations made to NPCO. Taiwanese people give significantly to nonprofit organizations. According to the 2004 Taiwan Social Change Survey made available on the Internet (Academia Sinica, 2004), nearly 38% of the surveyed participants reported an average cash donation of NT$7,969 (roughly US$250, in relation to a per capita income of US$13,982) to NPCO during the calendar year 2003. However, of the surveyed participants who contributed to charity, only 15% indicated they knew how the recipient organizations spent their donated money (Academia Sinica, 2004).

Current accounting rules in Taiwan require nonprofit entities to provide information about the stewardship of their organizations. Two types of accounting information are relevant: a) financial information disclosure to the donors by the recipient NPCO about the money received from donors, and b) financial accountability of the recipient NPCO to their donors. Accounting researchers examining these issues in other countries have documented that individual donors did take into consideration disclosure and accountability as factors influencing decisions to donate (Gordon & Khumawala, 1999; Greenlee & Brown, 1999; Parsons, 2007; Posnett & Sandler, 1989; Tinkelman, 1998; Weisbrod & Dominguez, 1986), and in a study carried out in the US Trussel and Parsons (2007) identified efficiency, stability, information available, and reputation of the organization as the four factors that influenced donors' decision to give. However, Parsons (2003) reported that there is a lack of understanding of NPCO financial reporting in charitable giving in the US and called for research to investigate the value-relevance of financial reports and accounting information in donors' giving behavior. The same situation may also apply in Taiwan.

However, another factor that strongly influences donations in western societies is religiosity, as is clearly demonstrated by the Giving USA Foundation estimate of giving by individual donors to religious congregations and religious organizations in 2008 as $106.89 billion, a figure that accounts for 35% of the total given to NPCO in the US (U.S. charitable giving estimated to be $306.39 billion in 2007, 2008). Nevertheless, despite a literature search we could not find any studies in which the effects of financial information on potential donors' decision to give in conjunction with the effect of religiosity have been examined. Of course, other factors beside religiosity may also impact on a potential donor's decision to give. Demographic factors found to be associated with charitable giving include age, gender, marital status, income and education level (Burgoyne, Young, & Walker, 2005; Lee & Chang, 2007). However, in our study we focused on the effects of religiosity on both the decision, and the amount, to give to charity in conjunction with variables pertaining to knowledge of financial information. Thus, our first research question was as follows:

How do religiosity and knowledge of financial information rank in importance in contributing to the individual's charitable-giving behavior with respect to other demographic variables of gender, age, income, marital status, and self-reported socioeconomic status?

A search of extant literature revealed that the effect of religiosity has not been adequately analyzed in the context of human rationality. The question of whether giving behavior can be seen as an individual's rational choice or simply an extension of one's self-perceived religious obligation, in the broad sense, remains unanswered in the current literature. …

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