Different or Equal Treatment? Donor Priority Strategy and Fundraising Performance Assessed by a Propensity Score Matching Study

Many nonprofit organizations apply a priority strategy to their donors instead of treating donors equally. The underlying assumption of this strategy is that different and preferential treatment of donors according to their donation amount positively affects fundraising performance. We conducted a propensity score matching study to analyze the fundraising strategies of seventy‐three cultural organizations in Germany. The empirical findings are discussed and complemented by qualitative data from twenty interviews with fundraising managers and private donors. The results show that, in terms of fundraising performance, nonprofit organizations that apply a donor priority strategy outperform organizations that treat donors equally. A donor priority strategy ultimately leads to a 125 euro higher total revenue per donor and an 87 euro higher profit per donor due to cost savings via better use of fundraising resources.     

Redefining sewardship: Examining how Fortune 100 organizations use stewardship with virtual stakeholders

Although Kelly's (2001) stewardship strategies have been discussed conceptually in public relations literature, they have not been examined through scholarly inquiry outside the fundraising realm despite repeated suggestions in relationship management literature. Through content analysis of the Fortune 100 organizations’ websites, this study examines how the four stewardship strategies are used by for-profit corporations. Results indicate that the current conceptualization of stewardship strategies for virtual behavior may be a better representation of relationship cultivation strategies than relying on the adaptation of interpersonal communication strategies to organizations.     

The Attributes of Effective NGOs and the Leadership Values Associated with a Reputation for Organizational Effectiveness

Building on prior research characterizing organizational effectiveness as a social construction, this article identifies the perceived attributes of effective transnational nongovernmental organizations (NGOs) and the leadership values associated with higher reputations for organizational effectiveness. Results are based on an in‐depth, mixed‐method interview study of 152 NGO leaders located in the United States and representing all major sectors of organizational activity. Among the twenty‐nine attributes that leaders identified in peer organizations that they regarded as particularly effective, leaders stressed instantiation of sound principles or strategy, a grassroots approach, large organizational size and resources, being collaborative, singleness of focus, campaigning abilities, funding and fundraising prowess, global scope, and quality people. Furthermore, statistical analysis reveals that NGOs with leaders who value similarities with peer organizations, grassroots approaches, diversity of strategies, dedication, professionalism, and distributed organizational structures have significantly higher reputations for effectiveness.     

The potential of Web sites as a relationship building tool for charitable fundraising NPOs

The Internet and especially the new challenges within Web 2.0 provide organizations with the possibility of encouraging two-way communication and engaging publics in dialogue. Charitable fundraising nonprofit organizations (NPOs) can particularly benefit from the Web's relationship building potential. This study aims to explore the potential of Web sites as an online-communication tool of Swiss NPOs. Via content analysis, the Web sites of 134 Swiss charitable fundraising NPOs were examined in order to point out how those organizations are using the Web to create dialogic relationships with their most important stakeholder groups, which are potential donors and the media. Results indicate that the potential of the Internet for dialogic communication is not used efficiently by most NPOs. Nevertheless, NPOs seem to be acknowledging the importance of engaging publics in dialogue, as most of them replied to information requests from potential donors and the media.¹     

Nonprofit fundraising with virtual reality

An increasingly competitive fundraising environment and the new media ecosystem have prompted nonprofit organizations to strengthen their digital marketing capabilities. Recently, a few nonprofits have used virtual reality (VR) technology in fundraising, which raises questions about its effectiveness. Does VR work, and if so, through what psychological mechanisms? Through a lab experiment, the usefulness of VR as a digital fundraising tool was investigated. Specifically, we compared the media effects of experiencing the same fundraising video on two different devices: (a) a head‐mounted VR and (b) a tablet. The results revealed that donation intention, perceived vividness, perceived interactivity, and social presence were all significantly greater with the VR medium than with the tablet medium. Next, we tested and successfully verified the mediation effect of social presence on donation intention. Finally, we verified that a viewer's sensation‐seeking tendency served as a moderator when the device type influenced donation intention. Specifically, the media effects of VR were stronger for high sensation seekers than for low sensation seekers. This study contributes to theory and research by verifying the VR fundraising effect and identifying the key role of social presence, and it also provides important managerial guidelines for media design in VR fundraising campaigns.     

Does Fundraising Professionalization Pay?

Although fundraising organizations in the third sector have gone through a progressive professionalization process, it remains unclear whether this development has led to any financial benefits. This article focuses on the question of whether or not it pays off for fundraising organizations to invest in professionalization. The data for this study come from 165 organizations representing 45 percent of the Swiss fundraising market. We first propose the term “organizational fundraising capability” as a new construct for measuring the degree of professionalization and rationalization in fundraising management. We then analyze its relationship to overall net revenue from donations as well as the growth of net revenue from donations. Our analysis indicates that, in addition to organizational size measured by total revenue, revenue share from donations, and expansion strategy, fundraising capability makes an important contribution to explaining both an institution's net revenue from fundraising and the level of increase in net donations. The consequences for the development of professionalization and rationalization in fundraising are discussed.     

A Faith‐Based Advantage?

This study explored whether religiously affiliated nonprofit schools participating in Milwaukee's long‐standing school voucher program engage in more fundraising and perform better on academic indicators than nonsectarian nonprofit schools. The analysis of three years of organizational‐level voucher school data reveals that a higher percentage of religious affiliated schools engage in fundraising, and that religious schools affiliated with umbrella organizations have higher test score indicators than nonsectarian schools. The author concludes that the religious advantage is likely in part a result of the broader access to networks and resources available to religious schools associated with umbrella organizations like a Catholic archdiocese or Lutheran synod. The results are relevant to policymakers who are considering implementing a reinvented government approach to the provision of public goods, as well as leaders of nonprofit corporations who seek to maximize performance.     

What Affects the Strategic Priority of Fundraising? A Longitudinal Study of Art,Culture and Humanity Organizations’ Fundraising Expenses in the USA

Fundraising is a crucial activity for many nonprofit organizations. However, scant research has examined how the strategic priority of fundraising activities may vary across organizations and over time. This study addresses this gap in knowledge by examining how economic and organization-specific financial conditions predict the priority of fundraising in a nonprofit organization. In particular, this study examines the changes in the ratio of art, culture and humanities organizations’ fundraising expenses to their total expenditure during the period of 2005–2012, which includes the great recession of 2007–2009. The findings reveal that, when facing an economic crisis, the ratio of fundraising expense to total expenditure increases, suggesting that fundraising becomes a higher priority under a hostile economic condition. The analysis also reveals differences in nonprofits’ reaction to recession depending on their revenue mix, with donative nonprofits reacting more sensitively than commercial nonprofits.     

The Effects of Capital Campaigns on Other Nonprofits’ Fundraising

This study focuses on the effects of capital campaigns on the fundraising performance of other nonprofits within the same geographic region. Drawing from research in organizational ecology and charitable giving, we offer a theory of capital campaign impact that says any impact of a campaign must be looked for in a carefully circumscribed area or population of organizations, and that campaigns raise awareness of the need for services within a particular area. We use data on capital campaigns at arts nonprofit organizations in forty‐eight counties across the United States between 1999 and 2007, coupled with financial data on nonprofits in the arts in the same county to test our hypotheses. The results from our analyses show that a major capital campaign positively affects other nonprofits’ fundraising, and the effect varies depending on the phase of the capital campaign. We discuss possible mechanisms that drive the positive effects of capital campaigns, and conclude with a short illustration.     

Determinants of compensation: A study of pay,performance, and gender differences for fundraising professionals

This study examines the determinants of compensation for fundraising professionals by addressing the following research questions: (1) Is there a significant pay‐performance relationship? (2) What are the factors that affect bonus and salary? (3) Is there a gender‐pay gap for individuals who are in the role of fundraisers? Data were collected over a four‐year period from a national sample of fundraising professionals employed across all industry classifications. Amount of money raised was the primary performance variable of interest. Bivariate tests for differences between males and females, as well as two‐stage simultaneous regressions, were used to determine the effects of fundraising performance on the pay of fundraisers. Results indicated a significant and positive pay‐performance linkage across all fundraising positions, particularly for chief development officers, as well as a consistent gender‐pay gap across fundraising positions.     

Managing occupational identity threats and job turnover: How former and current fundraisers manage moments of stigmatized identities

Maintaining a strong group of fundraisers amidst high turnover rates is essential to the financial health of nonprofit organizations. One issue potentially harming fundraisers' success and continued presence in the field is the negative reputation sometimes associated with fundraising work. This exploratory study uses Stigma Management Communication Theory and content analysis of in‐depth interviews with current and former university fundraisers to investigate how fundraisers communicatively manage stigmatizing messages associated with their occupation. The findings suggest that current fundraisers use a greater number and variety of stigma management strategies than former fundraisers described using. The findings also highlight the potential consequences and distinctions among ways of using humor to manage stigma messages. These findings can be translated into orientation and training programs for fundraisers, teaching them successful ways of framing their occupations and work.     

Interdepartmental relations and voluntary organizations: An exploration of tensions and why they arise

This article explores the nature of interdepartmental relations in voluntary organizations, looking, in particular, at the relationship between fundraising and service-providing departments. The findings indicate that the relationship between these two departments can be problematic, and the sources of tension between them are outlined. The author examines the question of why tensions arise. The fact that, for the voluntary organization, the needs and preferences of the service funder and the service recipient can be very different may be part of the explanation. Finally, the implications of the findings for our understanding of the role of voluntary organizations and the strategies they adopt are explored.     

Organizational Identity in Nonprofit Organizations: Strategic and Structural Implications

Organizational identity is what is central, distinctive, and enduring about an organization. This article argues that clarity and consensus about organizational identity are essential elements in setting successful long‐term strategy and making structural choices in a nonprofit organization. Four classes of nonprofit organization are examined here: grantmaking foundations, federated fundraising organizations, nonprofit academic centers, and social enterprises. In each case, alternative identities are described and the implications of each identity for organizational strategy and structure are analyzed. The article suggests that examination of identity should become an integral part of organizational development for nonprofit organizations and a subject for continued research.     

What Helped Nonprofits Weather the Great Recession?

This study examined the effectiveness of several financial strategies for nonprofit organizations in fighting the Great Recession. Using data from human services and community improvement organizations in the state of New Jersey, we tested hypotheses about the relationships between three measures of financial sustainability and various fundraising efforts and financial indicators. We found that (1) except for strong external funding relationships, funding efforts were generally not effective in enhancing financial sustainability during the crisis; (2) higher operating margin and equity ratio improved an organization's ability to generate revenue and maintain expense levels, but higher debt ratio and administrative cost ratio were generally harmful; and (3) revenue diversification might aggravate fiscal stress and cause more expense cuts in a severe crisis. These findings improve our understanding of the mechanics of nonprofit management during times of harsh fiscal conditions and suggest useful ways for nonprofit organizations to navigate future financial crises.     

What Works at Work? Toward an Integrative Model Examining Workplace Campaign Strategies

Many US employees are regularly asked to give charitable donations through work. The techniques used to solicit workplace donations vary. Drawing on a nationally representative survey, the study used a sample of donor responses to examine the effectiveness of several widely used campaign strategies: donor choice, company matching, public recognition, and solicitation support. The theoretical framework built on workplace research by Barman (2007) and established charitable giving mechanisms (Bekkers and Wiepking 2011a, 2011b). The research question was, “Do workplace campaign strategies lead employees to participate and to make (larger) donations in the workplace?” The positive outcomes of the strategies, aside from donor choice, were limited, suggesting that tried‐and‐true workplace fundraising strategies warrant additional scrutiny. The findings are meaningful to campaign managers seeking to identify approaches that generate workplace giving. For researchers, the results confirm growing attention to the importance of purpose‐based giving in comparison with community‐based giving.     

Walk the Walk but Don't Talk the Talk: The Strategic Use of Color‐Blind Ideology in an Interracial Social Movement Organization

In this study, I examine the strategies interracial organizations use in the twenty‐first century, where color‐blind ideology dominates. Much theoretical work on racism examines how it has evolved during different historical periods, but this work does not address how these changing forms of racism affect social movement organizations, particularly those on the left. While the literature on color‐blind ideology has examined how it is expressed by African Americans and European Americans separately, my work investigates how color‐blind ideology operates when European Americans and people of color are working together in the same organizational setting. Studies of social movements have examined how organizational culture affects strategies but have neglected how external racist culture and color‐blind ideology impacts organizational strategies. Findings from 3 years of ethnographic data collected on an interracial social movement organization and its corresponding coalition suggest that activists in interracial organizations use racism evasiveness strategically to maintain solidarity. I conceptualize racism evasiveness as the action resulting from color‐blind ideology within a larger system of racism. While activists perceive advantages to these strategies, there are also long‐term negative consequences. Without explicitly naming and addressing racism, progressive organizations may be limited in their ability to challenge systemic racism.     

EDUCATION'S GAMBLING PROBLEM: EARMARKED LOTTERY REVENUES AND CHARITABLE DONATIONS TO EDUCATION

I examine the impact that lotteries introduced to support education have on voluntary contributions to education. State lotteries, and the causes they are introduced to support, are highly publicized. This provides the opportunity to assess whether donors are crowded‐out by government spending of which they are almost certainly aware. Using donor‐level survey data and nonprofits' tax returns, I find that donations to education‐related organizations fall with the introduction of a lottery. This result is driven by donors' response to the new (highly publicized) government revenue source (rather than a decrease in nonprofit fundraising efforts). (JEL D64, H3, H75)     

Online Fundraising in the Human Services

SUMMARY

This paper examines emerging possibilities for use of the Internet in human service fundraising. Human service managers must compete for limited funds with their counterparts in educational, religious, health, and other nonprofit organizations. There is enormous potential for raising funds over the Internet; yet, this approach to resource development may not be appropriate or effective in some instances for certain human service agencies. The selection of fundraising approach must be consistent with the organizational context in which it is used. This paper provides examples of cases where use of the Internet may prove to be an effective method for human service fundraising. It also examines cases where use of the Internet may not be a good match for the organizational context, whether in terms of ethics or dollars raised.     

Professionalization and Cost Efficiency of Fundraising in Charitable Organizations: The Case of Charitable Foundations in China

This study examines the effects of professionalization on the cost efficiency of fundraising organizations in a unique research context, Chinese charitable foundations. Two important professionalization measures, professionalized human resource management and accounting practices, are adopted. Using data from audited annual reports from 2005 to 2009, we find that professionalization in general enables foundations to increase their fundraising cost efficiencies. However, further analysis indicates that this positive effect only occurs in private but not in public foundations. Furthermore, the positive effect of professionalization is more significant when raising unrestricted funds than when raising restricted funds from donors.