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Innovative Marketing, Volume 6, Issue 1, 2010

Robin L. Snipes (USA), Sharon L. Oswald (USA)

Charitable giving to not-for-profit organizations: factors affecting donations to non-profit organizations Abstract In today's era of evaporating operating profits, numerous organizations, including hospitals, universities and not-forprofit entities, are increasingly focusing on charitable giving as a funding source. In this paper, we examine the organizational and consumer demographic characteristics which influence charitable giving. This study adds to the body of research that has been conducted in the charitable giving area to help us better understand the relationship between these two aspects. An exploratory analysis of 143 males and 161 females suggests that people are most likely to make their charitable giving decisions based on the reputation of a charity. The results of this study also suggest that some factors have differing influences across demographic groups. Managerial implications are discussed. Keywords: management of nonprofits, nonprofit marketing, charitable giving, donations to charities, demographics and charitable donations, charitable donor behavior, management of nonprofit foundations.

Introduction Many©American universities and health services organizations were built on a foundation of philanthropic giving. In fact, prior to the age of health care insurance, hospitals relied on donations to remain viable. The onset of health insurance took the pressure off philanthropy for many years in the hospital industry as did state funding in our nation’s universities. However, today in the age of evaporating operating profits, charitable giving is becoming an important funding source and an area of focus for executives in many of our nation’s universities and not-for-profit organizations (Jaklevic, 2000). Statistics show that seven out of 10 people donate money during their lifetime, indicating that charity is big business (Hughes, 2002). Charitable organizations, specifically, have seen a 44 percent increase ($191 billion) since 1990 with some interruptions of late because of the stock market problems (Shinkman, 2001). Nonetheless, the importance of philanthropic giving is becoming more and more critical to long-term viability. Given this, it seems that the knowledge of what factors influence donor giving would be of great benefit to fund-raisers and development officers alike. For marketing strategies to be effective, marketers must first have detailed information on who their customers are and what motivates their actions. Peltier, Schibrowky, and Schultz (2002) suggest that most organizations have not gained full knowledge of why their donors perform as they do and what can be done to influence those behaviors. Therefore, in this paper we investigate six factors that influence charitable giving. Specifically, we examine those factors previously identified in the literature to determine which have the largest impact on charitable giving. We also examine to what © Robin L. Snipes, Sharon L. Oswald, 2010.

extent the influences of these factors are related to donor demographics. Though the charitable-giving literature shows that demographics are important influencers of charitable giving behavior, little empirical research has been done to better understand this relationship. 1. Theoretical framework 1.1. Factors that affect donor behavior. The question as to whether individuals differ systematically in their charitable giving has been a subject of much debate (Eckel and Grossman, 2000; Nelson, 2001; Sell, Griffin and Wilson, 1993). Some research suggests that people are rational beings and are likely not to make large contributions towards a public good (Landesman, 1995). Other studies of public goods have found the opposite to be true (Fischbacher, Gachter, and Fehr, 2000). While average household contributions to philanthropic organizations have grown in recent years, the number of people actually...
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