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.     

Indirect Reciprocity and Corporate Philanthropic Giving: How Visiting Officials Influence Investment in Privately Owned Chinese Firms

This study examines how privately owned firms that are listed on Chinese stock exchanges and often surrounded by Buddhist or Taoist temples use money to bind themselves to officials who can mitigate their underinvestment problems. Philanthropic giving is a traditional way of achieving this task. Based on social‐exchange theory, we consider the potential for indirect reciprocity, in which visiting officials do favours for local businesses that do favours for other social actors. We analyse whether China’s Buddhist and Taoist cultures influence how philanthropic giving induces visiting officials to do favors. We also examine temple locations and the behaviours of privately owned firms listed on Chinese stock exchanges from 2001 to 2012 in an empirical study that provides strong support for our arguments. Results show that philanthropic giving initiates and amplifies indirect reciprocity between visiting officials and local businesses, thereby increasing corporate investment. The magnitudes of these effects depend on the magnitude of religious norms. Our study thus illuminates the influence of visiting officials on corporate investment.     

The fundraising efficiency in U.S. non-profit art organizations: an application of a Bayesian estimation approach using the stochastic frontier production model

This article examines how efficient art organizations are in raising funds from private giving. We measure fundraising efficiency using a Bayesian estimation approach using the stochastic frontier production model. We show that fundraising efficiencies are generally quite low for art organizations in the U.S. when private giving is only considered as a fundraising output; however, when the effect of fundraising on ticket sales is considered, fundraising efficiencies improve substantially. We also show that government grants have a negative impact on fundraising efficiency and therefore partially crowd out private giving.     

Anticipating public expectations of humanitarian action—An ethnographic study of recruiting donors through face‐to‐face fundraising

In this article, we show how anticipating public opinion reinforces the tendencies of fundraising to work against the long‐term aims of humanitarian non‐governmental organisations through investigating the practices of face‐to‐face fundraising. The data of this qualitative analysis are based on the field notes of 45 encounters where we subjected ourselves to the fundraising performances of face‐to‐face campaigners. Furthermore, we conducted 12 semistructured interviews with fundraising and communication experts and made participant observations in the training sessions of new fundraisers and fundraising workshops. Through abductive content analysis, we show that face‐to‐face fundraising campaigns are designed to be simple and appealing rather than informative. The designers expect that audiences will not be able to digest complex information during brief encounters on the street. With advice from trainers, street fundraisers transform predesigned campaign materials into catchy, emotion‐loaded narratives. Street campaigners are also advised to echo the opinions of passers‐by. On the streets, campaigners need to establish a sense of proximity between the public and beneficiaries, (over)emphasise the agency capacities of donors, and particularise the humanitarian agenda according to the preferences of their audiences. Subsequently, our results show how anticipating public expectations sets manifold conditions for the discursive content of face‐to‐face fundraising.     

The diversification of charities: from religion‐oriented to for‐profit‐oriented fundraising

• Charities are increasingly relying on more complex and diversified fundraising structures to raise funds and attract benefactors. In adopting a historic perspective, this research identified five emergent fundraising structures, namely religion‐oriented, business‐oriented, marketing‐oriented, consumer‐oriented, and for‐profit‐oriented. The analysis critically evaluates the role that institutions and resources have played in each funding structure and draws conclusions concerning the management of charitable fundraising in a world where charitable fundraising, consumerism, and social media networking are increasingly entwined with the for‐profit motive.

Copyright © 2012 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.

     

Bringing legacy marketing to life

This paper aims to confront the long-held view that legacy fundraising is a depressing and death-related subject, which must be carried out apart from other fundraising activities. In the past, legacy fundraising has been focused on the mechanism and tax benefits, and the marketing focus has been on professional advisers. This paper challenges the past by discussing recent developments which show that legacy marketing is fulfilled more effectively by integrating it into all other fundraising structures and activities. In addition, successful legacy marketing is given a better opportunity to succeed if a rigorous strategic approach is taken and the resultant message is a positive one, which is spread by face-to-face meetings of peers—especially volunteers, trustees and even users of the not-for-profit service.     

Finding an academic home for fundraising: a multidisciplinary study of scholars' perspectives

• The high‐demand, high‐paying field of fundraising does not have an academic home in higher education, which hampers fundraising research and education. Recent advances in fundraising education and research can be attributed to four different disciplines: public relations, marketing, nonprofit management, and higher education administration. This disjointed approach has impeded the empirical study of fundraising, the development of theory in the field, and the education of future fundraisers. The purpose of this study is to begin the process to scientifically identify an appropriate academic home for fundraising that benefits fundraising practice, advances scholarship, and strengthens America's nonprofit sector. In‐depth interviews were conducted with 15 scholars from multiple disciplines who had published articles on fundraising in the three major nonprofit management and philanthropy journals. Findings show that there is no consensus among scholars about whether fundraising belongs in public relations, marketing, or nonprofit management. Although this study found no consensus among fundraising scholars about the appropriate academic home for fundraising, it does identify areas of agreement and disagreement on pertinent topics and provides a benchmark to guide further discussions about locating fundraising within an academic discipline.

Copyright © 2016 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.     

Buddhist approach to corporate sustainability

The win-win paradigm of corporate sustainability suggests that firms can transform sustainability issues into strategic opportunities, thereby creating shared values at the intersection of business and society. This study explores an alternate approach by delving into Buddhism and its meditative tradition. To deeply immerse myself into the monastic life of Buddhist monks and their meditation practice, I conducted a 5-year ethnographic fieldwork in 82 Buddhist temples across Asia. In the fieldwork process, I was even ordained as a Buddhist monk to internalize the practice. This level of immersion allowed me to investigate the nature of Buddhist meditative mindfulness and its role in reframing corporate sustainability. Drawing upon the findings and relevant literature, I suggest a Buddhist approach to corporate sustainability that offers a unique worldview on the interrelationships between economy, society, and environment. In conclusion, I compare the Buddhist approach to the win-win paradigm.     

Reinventing the rattling tin: How UK charities use Facebook in fundraising

Using a multicase study approach, this paper explores how the three biggest UK cancer charities by donations use Facebook in their fundraising campaigns, in order to facilitate understanding of the dynamics of philanthropic asking in a social networking site‐mediated environment. The analysis reveals that Facebook is primarily used to strengthen relationships with supporters, mainly via humanising the brand, fostering obligations, and encouraging social interaction. The mobilization of these relationships in fundraising is facilitated by persuasive strategies, including public recognition, authority, and the fostering of a sense of efficacy among fans, and the most common outcome of this mobilization is public endorsement of charities' fundraising campaigns via sharing. At a time when harsh public spending cuts have left gaps in charity funding that need to be filled by philanthropy, this study aims to make a practical contribution to knowledge by examining what works and how in Facebook fundraising.     

Fundraising as a theatrical event

This paper introduces and elaborates the notion of fundraising as a theatrical event. By exploring the theatrical setup, as well as social context, of two elite fundraising events that took place at almost the same time and place and for the same cause, the authors disentangle different components that are at play in a fundraising event. The paper shows that a fundraising event needs to align sensory, artistic, and symbolic theatrical levels to convey the desirability of the fundraising cause. In addition, not only the economic but also the social and cultural capitals of the hosts of the event may be of relevance to the fundraising.     

Leading and lagging indicators in fundraising management: A Canadian case study

Fundraisers, managers, and boards in the charitable sector are faced with an ongoing concern: how do they produce sustainable, predictable financial returns for their causes while minimizing the cost of fundraising? One way to address this is to improve the measurement of fundraising activities and this study asks how fundraising results should be communicated within organizations to support sustainability. This case study focuses on the fundraising program from one Canadian charity with a large, diversified fundraising program to examine how fundraisers can move beyond simple end-of-year financial ratios and implement one managerial technique, leading and lagging indicators, to improve long-term financial performance. A literature review, internal interviews, and internal document review are used to identify 81 potential leading and lagging indicators that fundraisers can use to develop a suite of indicators that fit their context, activities, and goals and to identify potential challenges with implementing indicators. The role of organizational context and characteristics in selecting an appropriate suite of indicators is also discussed.     

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.     

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.     

The five stages of fundraising: a framework for the development of fundraising

Little research has been undertaken on the development of fundraising in charities, as distinct from fundraising activities and methods. This paper arose out of a wider study of the impact of environmental factors on charity fundraising in the early 1990s. By looking at the development of fundraising in charities of all sizes, it became clear that there was a framework for fundraising. Specifically, the principal characteristics of the framework were based on the need for voluntary income and the influence of staff or volunteers in the fundraising process. This paper outlines the stages in the development of fundraising and their principal characteristics within the context of market orientation and organisation culture theory. It concludes with some implications for fundraising practitioners. Copyright © 2000 Henry Stewart Publications.     

The extent of excessive or insufficient fundraising among US arts organizations and the effect of organizational efficiency on donations to US arts organizations

• We estimate, for each nonprofit organization (NPO) in a sample of 606 US arts NPOs, whether the NPO's level of fundraising is ‘excessive,’ ‘insufficient,’ or neither, relative to the level that maximizes net donations. We find that the effect of a 1% increase in fundraising on net donations varies widely across the arts NPOs in our sample—from an increase in net donations of 8.91% of gross donations to a decrease of 3.82% of gross donations. Of the 100 NPOs in our sample with the highest donations, the estimated effect of a 1% increase in fundraising on net donations varies more narrowly—from an increase in net donations of 0.27% of gross donations to a decrease of 0.32% of gross donations. Of these 100 NPOs, we estimate that only 3 engaged in ‘excessive’ fundraising, but 83 engaged in ‘insufficient’ fundraising, and 14 did not engage in ‘excessive’ or ‘insufficient’ fundraising.We also provide evidence that reported organizational efficiency does not affect donations to arts NPOs. This finding may be useful to managers and directors of US arts NPOs who believe that organizational efficiency does impact donations and who, therefore, incorporate the effect on efficiency in their decisions to allocate resources across fundraising, administration, and program objectives.

Copyright © 2007 John Wiley & Sons, Ltd.     

Lifecycle‐based donor performance analysis

With charities of all sizes now having the ability to collect and store very large quantities of data about their donors on in‐house database systems, detailed donor performance analyses have an increasingly essential role to play in the effective planning and management of fundraising. If, however, such activities are to support fully the work of fundraisers then it is important that they are undertaken from the perspective of the fundraiser rather than of the specialist data analyst. This paper introduces an approach to donor performance analysis that is founded on what is termed a ‘donor lifecycle model’. The aim of this is to provide a formal analysis methodology that provides end results that can be more easily interpreted by nonspecialists and so more effectively used in support of the efficient planning of fundraising programmes. Copyright © 2000 Henry Stewart Publications     

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.     

Pictures of me: user views on their representation in homelessness fundraising appeals

There is a long‐standing ethical debate regarding the ‘right’ representation of recipients in charity marketing materials that are intended to accurately define and represent social problems whilst also prompting the maximum response in voluntary income. The study presented in this article makes a contribution to that debate by highlighting the views of charity beneficiaries regarding their representation in fundraising campaigns. Drawing on data from five focus groups conducted in cities across England, we explore the views of young homeless people regarding the images of homelessness that appeared in major charity campaigns aimed at raising money to fund homelessness services. Participants displayed a high level of reflexivity, demonstrating that they understood the issues involved with homelessness and the perceptions of people like themselves that exist in the public sphere and in the consciousness of potential donors. Although the participants held the view that maximising revenues through the use of simple, eye‐catching images is the prime goal of fundraising, they also expressed a desire for more nuanced campaigns that tell the dynamic stories of how people become homeless and the use of imagery that elicits empathy rather than merely arouses sympathy. Copyright © 2012 John Wiley & Sons, Ltd.