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.

     

Benchmarking the fundraising performance of UK charities

• The cost of fundraising and its effectiveness are issues of increasing importance in the UK nonprofit sector. Measuring fundraising effectiveness properly is critical to organisations on two fronts. From a financial stewardship perspective, charities need to ensure that their fundraising is as efficient as possible. From a public relations perspective they need to be able to demonstrate this to donors and our other stakeholders. There are many problems to be overcome in objectively judging a charity's performance relative to other nonprofit organisations. There are significant methodological barriers to be overcome to produce valid and meaningful comparisons. The well established Fundratios study shows that it is feasible to construct a methodology for robust benchmarking underpinned by good quality data which charities can use as a tool to inform the management of their fundraising activities.

Copyright © 2009 John Wiley & Sons, Ltd.     

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.     

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.     

Software for nonprofit fundraising and marketing

This paper discusses whether or not nonprofit donation processing software can be developed for nonprofit marketing. It shows, from previous research, that money-raising rather than money-processing is a crucial justification for a fundraising computer system. However, it is in money-processing rather than money-raising that most fundraising systems have their origins. It identifies key differences in software purpose; transaction processing is reactive, money-focused, and task-oriented, whereas nonprofit marketing is proactive, donor-focused and process-oriented. The paper looks at IT evolution over the last 50 years and recognises three phases: automate, informate and transformate. The paper suggests that fundraising systems are somewhere between automate and informate. Transformational IT has yet to come for the nonprofit world. The paper shows where the strains occur when a transaction processing system is pressed into use for marketing, and the most common causes of problems are identified. Finally it sets an agenda for nonprofit marketing systems which focus on holistic donor management, and suggests a number of data and functional needs that set marketing systems apart from transaction processing systems.     

Fundraising and public relations: a comparison of programme concepts and characteristics

This study compares characteristics of successful academic unit fundraising programmes and successful public relations programmes. Using interviews and surveys it explores whether academic unit fundraisers value the roles and responsibilities that align with identified strategic‐managerial and historical‐technical characteristics in public relations, whether demographic differences affect the role perception of the fundraisers, and whether the universities provide support for programme excellence. The results indicate that the fundraising programmes exhibit most of the characteristics of successful public relations programmes and that the academic units in which these fundraisers work provide support for them to do excellent fundraising. Demographics do not affect the results significantly. The data lead to questions for further study, including: How should fundraisers balance the benefit of having donors involved in programmes they support, with the university's need to retain autonomy and set its own priorities? Do excellent fundraising programmes strengthen relationships between alumni and universities? Do alumni with stronger relationships with the university contribute more, or more often, than those with less strong relationships? Copyright © 2002 Henry Stewart Publications     

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.     

Segmenting nonprofit stakeholders to enable successful relationship marketing: a review

• When establishing relationships with stakeholders, nonprofit organizations must define appropriate target groups to allocate resources purposively. This paper explicates that link by reviewing the literature on nonprofit stakeholder segmentation and by discussing whether stakeholder segmentation is perceived as a prerequisite of successful relationship marketing by nonprofit researchers.
• We develop two conceptual dimensions of nonprofit stakeholder segmentation: the stakeholders segmented and the segmentation criteria used. A systematic database and journal search yielded 53 papers, categorized according to these two dimensions. The studies are described briefly, and the relevance of the relationship marketing concept is examined and discussed. Several research gaps emerge from this review, leading to propositions for further research.

Copyright © 2014 John Wiley & Sons, Ltd.     

Using creativity to achieve an entrepreneurial future for arts marketing

• The marketing concept fails to explain marketing behaviour of small firms. Similar comments are now being made of large firms. This gap between theory and practice is even more significant in non-profit and arts organisations where sector specific philosophies often determine how marketing is embraced, with its underlying notions of the customer and profitability. Many of these organisations must overcome severe resource constraints by thinking creatively. This paper investigates the relationship between art, marketing, entrepreneurship and creativity in order to reach a clearer understanding of how creativity can assist both the arts organisation and those involved in researching the sector. There have been increasing calls within the academic marketing community to instil a creative philosophy within the research process. This call has not resulted in much research on the phenomenon within marketing, and certainly not from a nonprofit perspective. This paper discusses creativity as a concept drawing on a diverse range of literatures outside the management discipline. The link between creativity, marketing, entrepreneurship and art is analysed. Justification of the incorporation of creativity in the research process is presented for practitioners and theorists in marketing and the arts, so that they can learn from each others' disciplines. Implications for future research are presented, where creativity is viewed as the centre of a non-linear, free thinking understanding of artistic truth.

Copyright © 2005 John Wiley & Sons, Ltd.     

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.     

Creative marketing strategies in small museums: up close and innovative

• Museums are seeing decreasing resources along with increasing competition (such as the entertainment industry's recent foray into the education arena) for their market share (TiLE, Oct 2002). The prevalent perception that nonprofit institutions as a sector are mismanaged also requires museums to become more businesslike in their management and their marketing (Kotler & Kotler, 1998 ; Andreasen & Kotler, 2002 ; Salamon, 2003 ). Although larger museums have more access to human and economic capital, this article demonstrates how the flexibility and agility of smaller institutions positions them well to leverage their resources with creativity and innovation. To give credibility to the museum examples, the discussion recounts how the American wine industry rose in prominence both at home and abroad by sidestepping traditional marketing research methods, using instead an approach that was more like art.

Copyright © 2005 John Wiley & Sons, Ltd.     

Understanding public awareness of nonprofit organizations: exploring the awareness–confidence relationship

• Public confidence has often been viewed as a critical indicator of legitimacy within the nonprofit sector. Indeed, confidence is believed to be among one of the sector's most important commodities. Surveys, however, have shown that the public does not always have much confidence in the performance of nonprofit organizations. Although this lack of confidence is certainly concerning, few studies have assessed whether the public actually has any awareness of what nonprofit organizations are, and no studies have examined the personal characteristics associated with more (or less) nonprofit awareness. Thus, by using individual‐level data from a survey of public attitudes toward nonprofits in San Diego County (n = 1002), the purpose of this study was to explore how individual characteristics relate to nonprofit awareness and to examine the extent to which awareness of the sector influences confidence in the performance of nonprofit organizations. The findings from the study indicate that nonprofit awareness varies by several individual‐level characteristics—with many of those likely to be the most dependent on nonprofit services being the least aware of the sector. The findings also indicate that awareness of the sector is the most significant predictor of confidence in the performance of nonprofits.

Copyright © 2014 John Wiley & Sons, Ltd.     

Artists' attitudes to marketing: a cross-cultural perspective

• Although the music industry is dominated by a few global players, the vast majority of musical performances are by nonprofit organisations, self-employed musicians or small and medium enterprises (SMEs). But, while a great deal has been written about the marketing of music—distribution, branding, audience development, etc.—comparatively little is known about the attitudes of musicians themselves to marketing, despite the fact their role as both product and producer is so central to the musical experience.
• The research sets out to gain an understanding of this neglected topic by undertaking a cross-cultural analysis of musicians from two different cultures: it compares the attitudes of artists in a mature, post-industrial economy (UK) with those in a post-communist, emerging democracy (Poland). The research finds that society, culture and the economic environment appear to shape attitudes far less than art itself. Across both cultures the research discovers at best an ambivalence towards marketing, and at worst a general antipathy towards the whole notion of art-as-business.
• The implications of these findings, if replicated across other countries, other musical genres and across the arts as a whole, could be worrying. Historically, the arts have been dominated by nonprofit organisations funded at least in part by public and private subsidies, funds which are being substantially eroded in both mature economies and in developing nations. The challenge for nonprofits and SMEs in the arts, then, is about achieving some sort of engagement with business and marketing, without losing their artistic integrity in the process.

Copyright © 2006 John Wiley & Sons, Ltd.     

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.     

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.     

Ethics of Care as a theory of normative fundraising ethics

Little normative ethical theory exists in the nonprofit marketing literature. Previous attempts at an ethical framework for the field of nonprofit fundraising fell short of fully considering the full spectrum of relationships involved in fundraising practice. We introduce the concept of Ethics of Care, an ethical theory that centers around relationships and interpersonal well-being, as a philosophical foundation for professional ethics in the field of fundraising. We believe this theory provides a suitable framework in which to ground questions of professional ethics for nonprofit fundraising professionals. The adoption of Ethics of Care as a normative ethical theory for fundraising will allow applied ethical questions in the field to be explored in a way that more fully addresses all parties involved in fundraising and affected by its outcomes. Our paper illustrates the process of applying the foundational principles in specific ethical quandaries found within fundraising and aims to address the omission of the beneficiary in the majority of previous ethical frameworks and promote a new set of standards that fully incorporates and balances all stakeholders' needs.     

Finding the funds in fun runs: exploring physical activity events as fundraising tools in the nonprofit sector

An increasingly popular form of raising funds in the nonprofit sector is the special event that involves some form of physical activity. This paper describes a study that tracked 50 events over nine months in order to explore the phenomenon of physical activity events, their function as a solicitation strategy and as a public awareness/relations tool, and to gauge how these events met the needs of participants who donated their money and energy to a cause. Data were collected by means of participant observation at 12 events and interviews with 12 participants and 12 hosting organisations. Using a social marketing framework and diffusion of innovations theory as an approach to making sense of the data, the results suggest that events serve two main purposes: celebrating a cause and offering an event that satisfies the physical activity interests of participants, and that events appropriately act as fundraising and publicity tools. Implications for adopting a social marketing orientation so that nonprofit organisations can hasten the diffusion process by tailoring events to meet the needs of participants, and for further research are discussed. Copyright © 2003 Henry Stewart Publications     

The fundraiser's journey: A developmentally informed,grounded theory analysis

Fundraisers play a vital role in the success of nonprofit organizations, yet relatively little is known about the experiences, motivations, and thought processes that inform their career choice and development. This exploratory, cross-comparative case study of 3 fundraisers addresses this gap in the literature by examining some formative influences on fundraisers' careers, their professional growth aspirations and opportunities, and how, if at all, they engage in personal philanthropy. Results suggest that fundraisers' aptitudes, skills, and abilities may influence their career choice more than a sense of connection to the nonprofit sector or organizational mission. Further, fundraisers seek opportunities to exercise leadership at the individual, organizational, and community levels. Additionally, their personal philanthropy and social embeddedness play integral roles in their professional development. Although not large enough for generalization, these results suggest the need to study fundraisers holistically, including their psychological development and social embeddedness over time. We argue for the need to move beyond traditional marketing and public relations perspectives to explain fundraising. Instead, future studies should adopt a service-dominant logic framing that considers fundraisers as part of a larger philanthropic ecosystem. We conclude with several questions to guide future studies toward this line of inquiry.     

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.     

Lack of early engagement: a pre‐eminent barrier to Australian university bequest giving?

• Decreased government funding has placed increasing financial pressure on Australian universities. Currently Australian universities receive 6.6% of all donations to nonprofit organisations in Australia while universities in the United States attract 14%. These figures suggest there is considerable room for improvement for Australian universities. Efforts directed towards adding to knowledge of philanthropy to universities in Australia are, therefore, very topical at present. Despite acknowledged differences between the types of literature on gift‐giving it predominately centres on the motivation to donate to nonprofit organisations during an individual's lifetime (in vivo giving) with less focus on bequests. This exploratory study sought to gain insight into barriers to Australian University bequests. Lack of alumni engagement in Australian Universities was identified as a primary bequest barrier. Barriers identified previously in the literature (e.g. communications quality, performance, insensitive marketing) were considered secondary barriers to bequests. The results suggest a long term strategy is needed for Australian Universities seeking to improve donations. Universities need to engage students from the start of their academic tenure in order to be considered for a bequest. This paper proposes a model which highlights the consequences of this lack of early engagement and identifies key points in the academic and post‐academic process where successive challenges increasingly diverge the student from the university's bequest prospects.

Copyright © 2009 John Wiley & Sons, Ltd.