# Missing data logistic regression

I am currently researching which non-profit organisations would voluntarily appoint an auditor. One of my hypotheses is that NPO's that depend on grants and donations are more likely to voluntarily appoint an auditor. However, NPO's are not obliged to disclose the amount of donations and grants they receive. So of the population of 4,510 NPO's, only 1,610 disclose how much grants and donations they receive.

My idea to resolve this problem is to is to include a dichotomous variable $Z$ for whether the NPO discloses grant funding or not; a continuous variable $X$ for the amount of funding, to which you would assign 0 to the nondisclosers; and a term $Z \times X$ for their interaction.

Blank answers would be replaced with value 0. My only question is if this is considered a valid option and doesnt create any problems.

• Depending on grants/donations is different from receiving grants/donations. You need to collect more information to classify NPOs as dependent. – AdamO Apr 24 '18 at 12:13