Determinants of fundraising efficiency of nonprofit organizations: evidence from US public charitable organizations

Using a translog stochastic production frontier and maximum likelihood estimation method, we estimate fundraising efficiency and examine the determinants of fundraising efficiency in public charitable organizations in the United States. Our study shows that organizational size has a positive impact on fundraising efficiency and government grants have a negative impact on fundraising efficiency. We also show that charities that allocate more resources on fundraising related labor, as compared with fundraising‐related materials and equipments, are more efficient in fundraising. These findings provide important managerial implications for public charities. Copyright © 2010 John Wiley & Sons, Ltd.     

Fundraising efficiency in Buddhist temples in Thailand: An application of the stochastic frontier analysis model

Nonprofit religious organizations play an important role in enhancing social welfare in Buddhist countries. In Thailand, people are typically involved in Buddhist temples at many levels ranging from personal to communal to social. As a result, Buddhist temples in Thailand can conduct fund‐raising activities from donations or merit‐making activities from Thai Buddhists. This study examines the fundraising efficiency of Buddhist temples in Thailand by applying the stochastic frontier analysis model. Our results show that fundraising efficiency of Buddhist temples in Thailand is relatively low. In addition, the results show that government grants have a negative impact (the so‐called the crowding‐out effect) on fundraising efficiency. On the other hand, the use of information and communication technology improves fundraising efficiency of Buddhist temples in Thailand.     

The state-of-the-art and future research directions in bequest fundraising by nonprofit organizations: A systematic literature review

The topic of fundraising is garnering increased attention from nonprofit practitioners due to the worldwide growth of the nonprofit sector and the subsequent competition for private funds. Despite this surge, academic literature on fundraising and bequest fundraising, in particular, has remained mainly limited to narrow aspects of the discipline. Based on a systematic review of literature published over the past 25 years, we synthesize various research perspectives into a comprehensive framework of studies linking the different issues highlighted by the authors. The purpose of this article is to consolidate the state of academic research on bequest fundraising by not-for-profit organizations. The literature review underscores how research efforts have not paid much attention to bequest fundraising from the NPO's perspective, although as it has become an increasingly important source of income for charitable organizations. The majority of studies focus on the Donor's perspective, striving to understand what drives the desire to leave a charitable bequest. The findings of the SLR show a gap in the knowledge of NPOs' internal mechanisms concerning the particular topic of charitable bequests; from these insights, the future research directions are proposed.     

Efficiency,stability and the decision to give to nonprofit arts and cultural organizations in the United States

• Using data from the Cultural Data Project, this study extends the literature by examining the impact of financial disclosure information on donations to arts and culture‐related nonprofit organizations in the United States. Results for organization financial stability are for the most part counterintuitive: financially unstable arts and culture‐related nonprofits receive more donations. The current analysis supports prior research and finds evidence of a “crowding in” effect for fundraising expenses, suggesting that nonprofits that spend more on fundraising and marketing raise more funds than those that spend less. Additional analysis indicates efficiency matters to donors when it comes to fundraising efforts. As the “cost to raise a dollar” increases donations decrease. Nonprofit managers in arts and culture‐related organizations concerned about increasing donations should consider strategies that will increase the efficiency of their fundraising and marketing efforts. Copyright © 2015 John Wiley & Sons, Ltd.

     

Donor recognition: A double-edged sword in charitable giving

Previous studies discover confounding results on how donor recognition affects individual charitable giving. To answer the questions of how different donor recognition schemes affect individual giving and what type is more effective as a marketing strategy to meet different fundraising goals, we conducted a field experiment in China with three donor recognition types: voluntary, involuntary, and mandatory donor recognition. We used social media to recognize donors and verified the field experiment results with naturally occurring data. We observed similar behavioral patterns in both samples. The results of this study explain the mixed results from previous studies, suggesting that there is no one-size-fits-all approach for recognizing donors. Decision makers of nonprofit organizations need to select the appropriate type of donor recognition based on their fundraising goals.     

Developing a children's rights approach to fundraising with children in primary schools and the ethics of cultivating philanthropic citizenship

Fundraising literature predominantly focuses on adult donors, with limited literature addressing younger donors, particularly children, and virtually no discussion on the normative ethics which inform fundraising with children. Addressing this gap, this article examines the ethical dilemmas posed by the mainstreaming of charity fundraising in primary schools. Regardless of high levels of participation, research with primary school pupils shows that children's engagement in fundraising activities is often passive, with little decision making afforded to children. First, we question the ethics of passively engaging children in the fundraising relationship. Second, we question the role of fundraising more broadly in helping to cultivate children's philanthropic citizenship, suggesting that current fundraising mechanisms in schools are counter-intuitive to fostering long-term philanthropic engagement. We argue that by critically engaging children in the process of giving, children develop a deeper understanding of the cause areas that matter to them, which cultivates a longer-term commitment to philanthropy. This is potentially a different goal than that of many organisations involving schools in fundraising, where the focus is on incentivising transactional fundraising efforts aiming to raise as much money as possible and thus raises particular ethical challenges which must be considered. In this paper we draw on previous research and established frameworks for understanding philanthropic behaviour to explore the ethical challenges of fundraising with children in schools and present a pathway towards a more child-led, children's rights approach to fundraising in primary schools.     

A survey study on weights of decision criteria for job rotation in Thailand: comparison between public and private sectors

Five hundred Thai organizations (from both public and private sectors) were surveyed to learn how decision criteria were weighed when conducting job rotation. The organizations were categorized into three groups, namely, government agency (GA), private service company (PSC), and private manufacturing company (PMC). Three purposes of job rotation were considered: (1) restructuring of the organization, (2) periodic reshuffling of employee-job assignments, and (3) efficiency/productivity improvement. The findings from responded questionnaires (with a response rate of 41.40 per cent) show that the criterion weights are significantly dependent on both the organization type and the purpose of job rotation. It is found that organizations from both sectors considered ‘knowledge, skills, and abilities’ as a predominant decision criterion, irrespective of the purpose of job rotation. For the organizations that periodically reshuffled their current employee-job assignments, ‘job seniority’ was also considered as an important criterion. Regarding the other two job rotation purposes, organizations from the public sector consistently gave more attention to ‘job seniority,’ ‘years of service,’ and ‘age’ than did those from the private sector.     

The impact of face-to-face street fundraising on organizational reputation

Although many stakeholders perceive face-to-face street fundraising as unpleasant, nonprofit managers encourage it as a way to attract donors. To understand the long-term effects of this fundraising method, we used a mixed-methods experimental design to investigate how face-to-face street fundraising affects organizational reputation and stakeholder support intentions in comparison with letter fundraising. The findings reveal that face-to-face street fundraising has a significant negative influence on the stakeholders' perceptions of an organization. Further, qualitative data show that the negative perception originates primarily from perceived pressure, distrust, and obtrusion, which are triggered by face-to-face street fundraising. Our study thus reveals long-term reputational consequences that nonprofit organizations should consider before deciding on fundraising methods.     

Donor commitment: An investigation of fundraising strategies in churches and mainstream charities

One of the central questions in relationship fundraising is how to convert someone who makes a small yearly donation into someone who is a major donor covenanting a substantial part of his/her income. Drawing on research among 200 major UK fundraising charities, this paper explores how far the issue, of donor commitment is used in mainstream fundraising strategies, and finds that only a minority of charities place emphasis on this. This finding is compared with an analysis of models of giving in churches. It is argued that while churches may lack sophisticated approaches to fundraising, they may have important experiences in the area of committed giving which are relevant to fundraising strategies in other organisations.     

Charitable giving inside and outside the workplace: the role of individual and firm characteristics

Over the past several decades, charitable solicitations in the workplace have played an increasing role in the fundraising strategies of nonprofit organizations. Although many studies have examined the factors that influence overall charitable giving, very few studies have focused on giving when asked to donate in the workplace. This paper examines the determinants of charitable giving in and outside of the workplace in addition to the role of individual and firm-level characteristics. The study is based on one of the largest surveys of workplace giving including unique information on both workplace giving and overall charitable giving for 6000 employees in the USA. Specific factors uniquely influence charitable giving in the workplace. An employee's personal level of confidence in the nonprofit sector is strongly likely to influence workplace donations. At the firm level, an organization's size and industry also affect the presence of workplace campaigns and giving trends. Copyright © 2011 John Wiley & Sons, Ltd.     

Efficiency in fundraising and distributions to cause-related social profit enterprises

Managerial efficiency is as important in social profit enterprises (SPEs) as it is for more traditional financial-profit organizations. In this regard, both donors and SPE executives use efficiency information in making decisions. Here, we suggest a linked, two-stage Data Envelopment Analysis (DEA) methodology for assessing efficiency in both charitable fundraising and cause delivery, while empirically investigating results for international aid organizations. The model allows efficiency assessment for both the fundraising and utilization of generated funds when directed for cause-related purposes. This, in particular, allows for measurement of the organization’s managerial efficiency relative to both multiple phased goals and peer organizations. Additionally, the approach provides benchmarks for identifying sources of improved performance in fundraising and program/cause service delivery. It can also project the results of changes in inputs on the amount of resources available for the charitable organization’s cause.The proposed model(s) allow the examiner to assess performance while, at the same time, identifying those instances wherein the simple ratio measures commonly used in non-profit assessment are (1) deficient, and/or (2) misleading because of the use of ‘incorrect’ variables, or the ‘hiding’ of inefficiency if/when tax form categories are filed by an SPE. Importantly, the suggested two-stage DEA methodology can be useful for any organization with multiple-linked goals.     

Initial evidence on whether use of professional fundraising services increases fundraising effectiveness

• We provide initial evidence on whether use of professional fundraising services by US nonprofit organizations (NPOs) increases the effectiveness of NPOs' fundraising efforts. To a well-tested model of organization-level donations, we add an interaction term that captures the impact that professional fundraising fees an NPO incurs has on the effectiveness of an NPOs' spending on fundraising in raising donations. We find that professional fundraising fees has a significant positive impact on the effectiveness of fundraising efforts in raising donations for NPOs in the full, education, and health samples, but no impact for NPOs in the arts and human services samples. For NPOs in the full sample and NPOs in the education sample, one quarter of the effect of fundraising on donations stems from the positive impact of professional fundraising services on the effectiveness of fundraising in raising donations. For NPOs in the health sample, one half of the effect of fundraising on donations stems from the positive impact of professional fundraising services on the effectiveness of fundraising in raising donations. These results suggest that professional fundraising services significantly enhance the effectiveness of fundraising for these types of NPOs. While the results of this study seem to confirm the decisions of managers of education and health NPOs to utilize professional fundraising services, the results also suggest that managers of arts and human services NPOs may want to reconsider using professional fundraising services, at least the types of services they currently purchase and the way they currently utilize such services.

Copyright © 2009 John Wiley & Sons, Ltd.     

The economics of nonprofit organisations' governance

We determine theoretically when we can expect agency problems amenable to shirking agents to arise in nonprofit organisations and derive the conditions for governance measures to remedy these. Agents' private benefits of shirking need to be considered combined with the effect of their efforts on the probabilities of being successful in fundraising and production. If this effect is large, agency problems can more easily be avoided. Sufficient conditions for governance measures to reduce agency problems are derived. The empirical literature fits a number of the results derived and shows important gaps, especially w.r.t. the role of success probabilities.     

Market orientation and marketing in nonprofit organizations. Indications for fundraising from Victoria

The effectiveness of a market orientation has been established in other parts of the world. Using a modified replication study of 401 nonprofit organizations from Victoria, this research took some initial steps to assess fundraising and marketing activities. Studies in Australia have usually focused on only one part of the Third Sector. This study takes a different view and uses a criteria sampling method to survey all 11 sections named by the Australian Bureau of Statistics. The self‐reported data of fundraising activities showed that there were several choices available to all nonprofit organizations that can lead to an improvement in organizational performance. Results suggest that should nonprofit organizations have knowledge generating systems that evaluate their performance, this will improve outcomes for them. Even though organizational size is strongly linked to fundraising performance, there are key drivers that can aid even small organizations in their efforts. Copyright © 2010 John Wiley & Sons, Ltd.     

Online social network fundraising: Threats and potentialities

There has been a growth in online fundraising from crowdfunding apps, like GoFundMe, that propagate fundraising appeals on social networking sites. In the online space, these crowdfunding apps pose a potential threat to the traditional intermediation role of charities. The disintermediation threat is that donors choose crowdfunding intermediaries instead of charities to channel their giving. In this article, we discuss what makes crowdsourced fundraising effective and how charities can adapt to this new dynamic for more effective online fundraising emphasizing two key success factors: brand strength/reputation and managing the donor experience. In addition, we explain the advantages and disadvantages of social media fundraising and giving and propose ways charities can leverage their good reputations and public trust to stimulate reintermediation. Finally, we propose a landscape for future research based on model that emphases the fundraising campaign's ability to stimulate viral sharing within and between online social networks.     

Lost in translation: A sociological study of the role of fundraisers in mediating gift giving in non-profit organisations

Recent years have seen a significant growth in the technical literature exploring charitable giving and fundraising. However, there is little empirical research on the actual workings of the fundraising process within non-profit organisations. In this paper, the day-to-day practice of fundraising is analysed from a sociological perspective that draws on the theories of the gift proposed by Mauss ( 1954 ), Titmuss ( 1970 ), and colleagues to propose an alternative, more complex giving model to strangers. Using qualitative data drawn from 44 interviews with fundraisers and their colleagues across 14 organisations, this study examines how fundraisers build and maintain long-term giving relationships with the individuals who provide financial support to non-profit organisations. Findings suggest that the primary gift giving relationship exists not between the giver and beneficiary but rather between the giver and fundraiser. The fundraiser, in this instance, actively employs tactics of reciprocity to both secure new gifts and ensure that givers continue to support their organisation. In doing so, fundraisers construct a narrative of the donor's imagined direct connection to the beneficiary and their “good gift”. Simultaneously, the fundraiser works with colleagues to construct the idea of the caring, connected, and sacrificial donor as a means to solicit their support in maintaining the continued gifting from these supporters. The paper concludes with a consideration of the ways in which these narrative constructions are incorporated into fundraising and organisational strategies; and two implications for perceptions of the role of philanthropy and fundraising.     

中国国有、私营和外资工业企业地区间效率差异研究

根据中国30个省份工业企业2001~2011年的面板数据,基于Fre-Primont TFP指数DEA方法,测算各省份国有、私营和外资企业的综合效率、TFP增长及其分解要素,对其发展模式进行类别划分。结果表明,外资和私营企业的综合效率均值始终高于国有企业;工业企业表现出不同的效率优势,私营企业的优势在于技术效率和规模效率,国有企业的优势在于技术效率水平低但增长趋势显著,外资企业的优势在于范围经济效率;在研究期内TFP增长均产生了大幅增长,主要原因在于整体技术进步水平的大幅提高。进入高效高速发展模式省份最多的是外资企业,其次依次是私营和国有企业,三类企业地区间两极分化趋势明显。     

Unofficial Development Assistance: A Model of Development Charities’ Donation Income

The empirical literature on the determinants of charities’ donation income, distinguishing the charitable cause, is small. We consider the case of development charities specifically. Using a panel covering a quarter of a century, we observe a strong fundraising effect and a unitary household income elasticity. We find evidence that the conventionally identified ‘price’ effect may simply be the product of omitted variable bias. Our results further suggest that public spending on development crowds in private donations for development. We find a positive spillover effect of fundraising, suggesting the efforts of one development charity may increase contributions to other development charities.     

The people behind the scenes: Episodic volunteering at fundraising events

Nonprofit organizations (NPOs) have become increasingly dependent on episodic volunteers (EVs), those that would help carry out an event with little training and expectation to commit to future events. Despite its importance to the survival of NPOs, the use of EVs with respect to fundraising has received little research focus. Furthermore, none of the existing studies identified examined how fundraising EVs differ from other EVs. This study seeks to contribute to our understanding of fundraising EVs using a global perspective. Data were generated using surveys distributed in seven countries, tallying more than 4,000 respondents. Variables included demographic characteristics, previous donation and volunteer history, motives, mode of volunteering, and overall experience. The data were analyzed by applying between-group (logistic regression on participation) and within-group analysis (ordered logistic regression on willingness to participate in the future). Data were further analyzed by examining differences by country. We found that country, gender, religion, income, employment, history of donations, mode of volunteering, and several motives, both intrinsic and extrinsic, were significant in the logistic regression analysis of participation in fundraising episodic volunteering. The ordered logistic analysis unexpectedly found that the only predictors to foster a willingness to engage again were the responsiveness of the event team and a desire to fulfill spiritual satisfaction. In recruiting and selecting EVs for fundraising events, NPOs should consider previous or current donors and those with regular volunteering experience and they should market volunteer opportunities towards those in search of spiritual fulfillment and meaning. Moreover, NPOs should prioritize quick and clear communication with fundraising EVs in order to foster a willingness to volunteer again. Lastly, NPOs should regularly assess for country-specific factors and contexts that may affect episodic volunteering in fundraising events. Our paper illustrates who fundraising EVs are, their motives, how they choose to volunteer, and what contributes to their willingness to volunteer again. Given the limited research on fundraising EVs, this study serves to help lay the foundation of research for this unique subgroup. Our aim was to not only address the dearth of literature but serve as a springboard for future research on fundraising EVs.     

Integrated donor management: Using telemarketing to increase donor affinity and fundraising income

This paper introduces the concept of integrated donor management (IDM). This is defined as combining two or more development methods to maximise a donor's affinity to an organisation. With IDM, all activities are designed to educate, cultivate and appreciate donors. The telephone is considered within this framework and specifically its relationship is explored with direct mail, major donors, planned giving and donor acknowledgement. Guidelines are provided for using the phone responsibly to increase donor affinity and fundraising income.