Guardians of Trust: Exploring Internal Whistleblowing Dynamics in Nonprofit Finance and Accounting

Abstract

In the realm of nonprofit organizations, where the delivery of crucial services and charitable missions often intersects with vulnerabilities to fraud and corruption, the role of internal whistleblowing becomes paramount for nonprofits’ ethical operations and maintaining public trust. This research delves into how organizational identification and psychological safety predict the internal whistleblowing intentions among employees in nonprofit organizations. The study focuses on a specific subset of this sector, examining 81 full-time finance and accounting professionals employed in 501(c)(3) organizations in the United States. The findings reveal a significant ability of both organizational identification and psychological safety in predicting an employee’s internal whistleblowing intentions. Specifically, organizational identification predicts internal whistleblowing intentions by 19.96%, while psychological safety predicts 19.01%. When these constructs are combined, they predict 27.83% of the variance in internal whistleblowing intentions. These results emphasize the need for nonprofit organizations to cultivate an environment where employees feel a strong sense of belonging and safety, as these factors are instrumental in encouraging ethical practices and transparency. This study not only fills a gap in the existing literature on nonprofit whistleblowing but also provides actional insights for nonprofit leaders to foster an ethical, transparent work culture.