The Effect of Financial Irregularities on Donor Confidence in Nigerian Charities: A Case Study of Red Cross Nigeria
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Background of the Study
Charitable organizations rely heavily on donor funding to execute their programs and projects. In Nigeria, financial irregularities such as fraud, misappropriation, and lack of transparency have eroded donor confidence in many charities (Adegbite & Oladipo, 2023).
Red Cross Nigeria, one of the country’s oldest humanitarian organizations, has faced challenges in maintaining donor trust amid growing concerns about financial irregularities in the sector. Addressing these issues is essential for sustaining donor support and ensuring effective service delivery (Olowu & Bello, 2023).
This study examines the effect of financial irregularities on donor confidence, focusing on Red Cross Nigeria.
Statement of the Problem
Financial irregularities in Nigerian charities undermine trust and deter potential donors, reducing funding and compromising organizational effectiveness. Despite the Red Cross Nigeria’s long-standing reputation, allegations of financial mismanagement have raised questions about its accountability practices (Eze & Okafor, 2024).
This study seeks to investigate how financial irregularities impact donor confidence and propose measures to rebuild trust in charitable organizations.
Objectives of the Study
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To assess the impact of financial irregularities on donor confidence in Red Cross Nigeria.
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To identify the types of financial irregularities affecting Nigerian charities.
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To recommend strategies for enhancing financial accountability in Nigerian charities.
Research Questions
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How do financial irregularities affect donor confidence in Red Cross Nigeria?
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What types of financial irregularities are prevalent in Nigerian charities?
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What strategies can enhance financial accountability in Nigerian charities?
Research Hypotheses
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H₀₁: Financial irregularities do not significantly affect donor confidence in Red Cross Nigeria.
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H₀₂: Types of financial irregularities do not significantly differ in their impact on donor confidence.
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H₀₃: Proposed strategies do not significantly improve financial accountability in Nigerian charities.
Scope and Limitations of the Study
This study focuses on financial irregularities in Red Cross Nigeria and their effect on donor confidence. Limitations include difficulties in accessing sensitive financial records and variability in donor perceptions.
Definitions of Terms
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Financial Irregularities: Practices such as fraud, misappropriation, or errors that deviate from standard financial procedures.
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Donor Confidence: The level of trust donors have in an organization’s ability to manage resources effectively.
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Charitable Organizations: Nonprofit entities dedicated to humanitarian or social welfare activities.
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