Excessive,optimal, and insufficient fundraising among the Nonprofit Times 100

• Using a six-factor model of donations, we estimate the effect on net donations; i.e., donations less fundraising expenditures, of a one percent marginal increase in fundraising expenditures, for each sample nonprofit organization (NPO) from the Nonprofit Times 100 from 2000 to 2002. No prior study of U.S. NPOs estimates the effect of fundraising expense on net donations. We then use these estimates and what we argue is the correct benchmark, the ratio of fundraising expense to donations, to provide evidence, for each NPO, on whether the NPO's level of fundraising is ‘excessive,’ ‘optimal,’ or ‘insufficient,’ relative to the level that maximizes net donations. All prior studies using log-log models use what we suggest is an incorrect benchmark for evaluating NPO fundraising behavior.
• The estimated effect of a 1% increase in fundraising on net donations varies widely across NPOs in our sample—from an increase in net donations of 0.18% of gross donations to a decrease of 0.66% of gross donations. Of the 76 Nonprofit Times 100 NPOs with usable data in 2002, we estimate that 24 engaged in ‘excessive’ fundraising, 18 engaged in ‘insufficient’ fundraising, and 34 did not engage in ‘excessive’ or ‘insufficient’ fundraising; i.e., we could not reject the null hypothesis of ‘optimal’ levels of fundraising.

Copyright © 2006 John Wiley & Sons, Ltd.     

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.     

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.

     

CSR and service quality in nonprofit organizations: the case of a performing arts association

• The relationship between corporate social responsibility (CSR) and marketing performance has been widely investigated recently, but mostly in relation to for-profit companies. This paper highlights the importance of this topic for nonprofit organizations (NPOs). Focusing on an Italian NPO operating in the performing arts and entertainment industry, two empirical studies (a quantitative survey and a qualitative exploratory enquiry) prove the strategic relevance of CSR in nonprofit contexts. The results demonstrate that CSR can be considered an additional dimension of the customer perception of service quality in NPOs and reveal that customer perception of the social responsibility of the studied NPO is strongly linked to its institutional mission and to the modalities through which it pursues that mission.

Copyright © 2014 John Wiley & Sons, Ltd.     

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.     

Online privacy and security practices of the 100 largest US nonprofit organizations

• Although online consumer privacy has been an important issue in the commercial realm for more than a decade, nonprofit organizations (NPOs, or nonprofits, for short) have just begun to address the topic recently. No published scholarly research has examined the online information practices of the largest NPOs with regard to privacy and security issues. The absence of data leaves one unable to empirically gauge the extent of NPO compliance with the Federal Trade Commissions (FTCs) suggested information practices. Such an investigation would be useful not only to US nonprofits but also non‐US nonprofits that are reaching US donors via their web sites.
• This study examines the online information practices of The Nonprofit Times 100 web sites and compares their practices to that of their commercial counterparts. The NPO web sites were found to collect just as much, and in some cases even more, personally identifying information as the commercial sites. The NPO web sites were more likely to display a privacy disclosure and privacy seal. Of critical concern, and not assessed in the commercial samples, is that nearly all of the NPO sites post personally identifying information (of individuals who are not employees).
• The current study provides benchmarks useful for assessing security issues pertaining to the collection, use, and even posting of personal information for NPO web sites. It also proposes actions for improving online security and privacy with the hope of encouraging more discussion of these important issues within the NPO community.

Copyright © 2008 John Wiley & Sons, Ltd.     

What are ‘unpopular causes’ and how can they achieve fundraising success?

• Recent efforts to grow and strengthen the culture of philanthropy in the UK have largely focused on two dimensions: the total amount of money donated and the effectiveness of philanthropic spending. This paper explores a third dimension: the destination and distribution of donations. A defining characteristic of charitable giving is that it is voluntary rather than coerced, and the resulting respect for donor autonomy makes people wary of promoting one cause above another or implying that any beneficiary group is more or less ‘worthy’ of support. However, the absence of much comment on, or significant research into, the destination of donations does not alter the fact that some groups succeed in attracting significant philanthropic funds whilst others struggle to secure many—or any—donations. This paper explores the concept of ‘unpopularity’ in the charity sector, especially in relation to its impact on fundraising. We unpack what this loaded phrase means, identify good practice by those seeking support and present case studies of charities that have overcome perceived unpopularity to achieve success in raising voluntary income. We suggest that by investing organisational resources and effort in fundraising, by framing the cause to maximise the arousal of sympathy and minimise concerns about beneficiary culpability and by avoiding the unintended negative consequences of self‐labelling as ‘unpopular’ no charity need assume it is their destiny to languish at the bottom of the fundraising league tables.

Copyright © 2016 John Wiley & Sons, Ltd.     

Improving the financial sustainability of nonprofit organizations through tourism-related activities

One of the greatest problems facing nonprofit organizations (NPOs) is the lack of funding, which directly jeopardises their work. NPOs working in tourist destinations have the opportunity of satisfying this need through tourism, by linking the objectives of their own activities to the objectives of tourist destinations. This article aims to establish whether NPOs working in tourism have capitalised on tourism as a means for increasing their own income. In other words, do NPOs that more frequently conduct tourism-related activities have a higher level of financial sustainability, reflected in a higher share of income from self-funding activities than from donations and grants? To this end, primary research was conducted using a questionnaire on a sample of 205 NPOs whose activities impact tourism and which operate in one of the four most developed tourist destinations in Croatia with regard to tourist traffic in the past 10 years (Poreč, Rovinj, Dubrovnik and Medulin). Research results indicate that an increase in the frequency of conducting activities directly impacting tourism is paralleled by an increase in the share of income generated by active self-funding (income from selling products and providing services) and other types of self-funding (income from memberships fees and assets), with a decrease in the share of income from donations and grants. This study contributes to the existing knowledge by connecting NPOs with the tourism system and by identifying and defining opportunities for NPO self-funding through tourism as a means of improving NPO financial sustainability.     

Motivations and forms of corporate giving behaviour: insights from Australia

• Although corporate support for many nonprofit organisations (NPOs) represents only a relatively small component of their overall income its importance is growing. As a consequence, the need to understand corporate giving behaviour in a way that supports the development of strategically targeted and successful marketing campaigns is of growing importance to marketing managers in many NPOs around the globe.
• This paper presents the findings of a study into the ‘why’ and ‘how’ of corporate giving behaviour in Australia. In the seven case studies examined, there was no strong evidence that Australian corporations give for other than strategic profit maximisation or political reasons. In contrast to the literature, altruistic and managerial utility did not emerge as strong motivational factors.
• This study also found that corporations are likely to have a number of corporate giving programmes each with its own underlying motivation and strategic purpose which network together to form a hierarchy of corporate giving programmes.
• The paper concludes by discussing the implications of this research for NPO managers attempting to increase their level of corporate support.

Copyright © 2007 John Wiley & Sons, Ltd.     

Strategic stakeholder orientations and performance consequences—a case of private nonprofit performing arts in the US

• This paper borrows a market orientation perspective in considering how organizations behave toward stakeholders and the implications on performance in the institutional performing arts environment. To investigate the relationship between stakeholder orientations and organizational performance, both interviews and a survey instrument were used. Using nonprofit performing arts organizations in three metropolitan areas of Northwestern US as a sample frame, primary data was collected from leading directors of these organizations. The results generally indicate a positive relationship between stakeholder orientation and organizational performance. Complex relationships between dimensions of stakeholder orientation and performance consequences were also observed.

Copyright © 2009 John Wiley & Sons, Ltd.     

What some recent research tells us about planned giving (legacy marketing) in North America

• The transformation of fundraising from an ‘emerging profession’ to a ‘true profession’ is contingent on the continual development of a formal body of knowledge based on theory and research. To further that goal, this paper, written from a Canadian perspective, reviews current and recent research studies in both Canada and the USA, focusing specifically on the areas of legacy marketing and bequest gifts.
• The aim of this paper is two-fold: first, to bring forward ‘established knowledge’ in this relatively new and burgeoning area of fundraising; and second, to draw attention to areas where there is a knowledge gap, thereby laying the groundwork for further research and progress in this area.

Copyright © 2005 John Wiley & Sons, Ltd.     

Satisfaction,organizational commitment and future action in charity sport event volunteers

• Charity sport events (CSEs) are a key revenue source for nonprofit organizations (NPOs) with large numbers of volunteers needed for success and cost‐effectiveness. This study explored determinants of CSE volunteers' satisfaction, organizational commitment and intended future actions (CSE, other NPO activity/event volunteering, donating money). Relay for Life volunteers (N = 290) from one Australian state completed a cross‐sectional survey. Significant pathways were found from socializing/enjoyment (β = 0.17), fighting cancer (β = 0.29), financial support (β = 0.21) motives and social norm (β = 0.23) to satisfaction; 52% variance was explained. Age (β = ?0.09), survivorship (β = 0.09), region (β = 0.07), fundraising goal (β = 0.08), advocacy (β = 0.15), financial support (β = 0.25), social/enjoyment (β = 0.23) motives, social norm (β = 0.23) and satisfaction (β = 0.21) were linked with commitment; 63% variance was explained. Paths between satisfaction, commitment and intended future actions (CSE, NPO activity/event volunteering) were significant (βs = 0.17–0.43). Future targets to increase CSE volunteer satisfaction and commitment involve similar (social/enjoyment) and diverse (action‐oriented) motives, with satisfaction and commitment key contributors to future actions supporting NPOs. Copyright © 2016 John Wiley & Sons, Ltd.

     

Regional voices talk theatre: audience development for the performing arts

• Audience development is somewhat of a ‘buzz word’ within the Australian performing arts sector at present. However, rather than actually engaging with audiences and with non‐attenders to discover how to best serve the community, most of the performing arts organisations approach audience development from a product‐centred viewpoint.
• In direct contrast to this, the Talking Theatre project (2004–2006) was implemented in regional Queensland and in the Northern Territory in Australia as an audience development initiative focused on the consumer. The project sought to assist performing arts centres (PACs) to better engage with their local communities and to build new audiences for the future. In particular, the research aimed to understand non‐attenders, their reasons for non‐attendance and their reactions to a range of live performances they experienced under study conditions.
• The Talking Theatre project provided the vehicle for introduction, communication and relationship building to occur to assist in attitudinal and behavioural change. The non‐attenders enjoyed their experiences at the PACs and have begun attending performances outside of study conditions. Limited awareness of the performing arts' relevance to their lives combined with a lack of positive peer influence to attend, were the chief deterrents to attendance for the participants in the study.

Copyright © 2007 John Wiley & Sons, Ltd.     

Relationships among levels of government support,marketing activities,and financial health of nonprofit performing arts organizations

• This exploratory study researches and analyzes the empirical effects of financial levels of government support and marketing practices on the financial health of nonprofit performing arts organizations. Declining government subsidies and increasing competition from non-traditional sources have presented these organizations with unique opportunities and challenges that call for a market-centered, as well as an art-centered approach. Financial health is critical for the long-term success of a nonprofit performing arts organization. Few empirical studies have examined the interrelationships between these key variables. This study analyzes a sample of 63 American professional symphony orchestras employing 20 years of data. The correlations among financial levels of government support and marketing activities were positive and significant, the correlations among levels of government support and financial health were negative and significant, and the correlations between levels of marketing activity and financial health were negative and varied in significance. Causal analyses were less conclusive, but significant causal relationships were found for large symphony orchestras, indicating that segmentation research may be warranted. Implications and opportunities for future research are presented which have potential application for government agencies, academic researchers, and arts organization managers, boards of directors, and donors.

Copyright © 2006 John Wiley & Sons, Ltd.     

Volunteerism,compassion and religiosity as drivers of donations practices

• The topic of donations is one of high relevance and has been widely covered in contemporary marketing literature. It is a topic of interest to both theoreticians and practitioners alike, particularly due to its implicit links to fundraising activities and research. The reality of what makes an individual donor ultimately part with his money and give it away to a nonprofit organization is a hot contemporary topic. This study looks into the role of religiosity as a predictor of donations practices. Also volunteerism and compassion, two acts of pro‐social behaviour are analysed as predictors of donations practices. Using data collected from a survey of 612 charity donors in Portugal, the results show unequivocally that religiosity does influence donations practices, and so being a predictor of donations practices. Moreover, pro‐social behaviour is a predictor of donations practices when in the case of volunteerism, but not in the form of compassion.
• The findings are particularly useful for nonprofit organizations that want to attract and retain individual charitable donors and may also help to increase donation regularity, to obtain higher amounts, and donations both to religious and to secular organizations. Finally, it can be stated that the understanding of religiosity sheds light on knowledge about donations practices, and that this study also makes an important contribution to academia, as it is the first study conducted in Portugal that assesses the drivers of donations practices.

Copyright © 2015 John Wiley & Sons, Ltd.     

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.     

First‐year donation behavior and risk of supporter lapse

• In this research, we explore supporter lapse behavior after making first‐year donations to a nonprofit organization. We argue that two observable variables — the monetary amount of first gift at sign‐up and the number of gifts given in the first year of the support relationship — can be used to approximate the level of commitment to supporting the organization and to predict likelihood of lapse in subsequent years. The reasoning is that the two variables are indications of the psychological resources as well as the financial resources expended in reaching donation decisions. The research hypotheses were tested using fundraising data extracted from the databases of two leading US‐based nonprofit organizations. Results indicate that both variables had significant effects. Interestingly, the number of gifts given in the first year of the support relationship had a much bigger effect than the dollar amount of the gift at sign‐up: In one organization, supporters who donated more than one gift in the first year were 39% less likely to lapse in subsequent years compared with their one‐gift counterparts, while a tenfold increase in the dollar amount of the first gift at sign‐up (e.g., from $10 to $100) predicted only 4% decrease in the lapse likelihood in subsequent years. Insights from this research may help to build better practices of supporter base management in “low‐touch” fundraising programs for attracting, building relationships with, and sending appeals to supporters.

Copyright © 2016 John Wiley & Sons, Ltd.     

Understanding the decision-making processes for arts sponsorship

• Corporate support is a significant revenue stream for non-profit organisations, yet little is known of the actual decision paths companies take when making these decisions and what characterises these paths. This study seeks to develop a greater understanding of decision processes for companies considering sponsorship of the arts. A multiple-case study approach was taken, with participants from arts organisations and paired sponsoring companies, resulting in the finding of three decision paths: one characterised as high-level and intuitive, one as driven at a lower-level, and a third initially instigated by a third party. Analysis of these paths highlights the importance of existing relationships as well as a ‘fit’ between both parties. In addition, the company's orientation towards more commercial or philanthropic goals is found to be a key element determining the path taken, and the role of individual informed intuition is highlighted as crucial in moving decisions forward. This study extends knowledge in sponsorship and corporate philanthropy, into a decision making and arts sponsorship context. The findings also offer a useful perspective for non-profit arts managers as they pitch their event to the business sector.

Copyright © 2012 John Wiley & Sons, Ltd.     

Just keep it simple: a field experiment on fundraising letters

• This paper studies how the use of a colour picture in fundraising letters affect response rates and the amount donated in a fundraising campaign. Envelopes, with a full colour picture were tested against envelopes, without a picture in a controlled field experiment at a national religious charity in the Netherlands. Letters (89 937) were sent out to planned as well as incidental donors in four experimental groups. Results show that packages with more graphics yield lower donations, because both response rates are lower and the amount donated per letter is lower. We interpret this finding from donor aversion against high fundraising costs.

Copyright © 2007 John Wiley & Sons, Ltd.     

Developing a measurement approach for reputation of non‐profit organizations

• As a result of the increasing adoption of private sector firms' values and concepts, non‐profit organizations (NPOs) are becoming more and more aware of intangible assets' importance for achieving competitive advantages. Even though reputation can be considered an organization's central intangible asset, there is still no appropriate measurement approach for reputation in this context. In this paper, we identify the dimensions of NPO reputation and develop indices to measure these components. We develop a model by means of a qualitative inquiry and a quantitative study using a large‐scale sample from the German general public. We find support for a two‐dimensional measurement approach comprising an affective and cognitive component as well as four antecedent constructs (“quality,” “performance,” “organizational social responsibility (OSR),” and “attractiveness”). The results of a second quantitative study in which we examine NPO reputation's relationship with important outcome variables, such as willingness to donate or work as an honorary member, provide support for the measurement approach's stability as well as criterion validity. Furthermore, the results reveal the affective dimension's importance regarding positively influencing donor behavior.

Copyright © 2009 John Wiley & Sons, Ltd.