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Do Nonprofits Engage in Excessive Fundraising?

Author

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  • Gayle, Philip

Abstract

This study examines whether nonprofits (NP) engage in ‘excessive’ fundraising (EF) relative to what may be socially optimal. The investigation requires using a structural empirical model to approximate socially optimal fundraising levels. The analysis reveals evidence of EF of up to 31% in a year and identifies the “donor-stealing” attribute of fundraising across rival NPs as a key driver of EF. I show that if rival NPs cooperatively set fundraising levels, then this practice effectively eliminates EF since each NP internalizes the “donor-stealing” effect. The findings support united fund drives like those we see mobilized by the United Way.

Suggested Citation

  • Gayle, Philip, 2024. "Do Nonprofits Engage in Excessive Fundraising?," MPRA Paper 120684, University Library of Munich, Germany.
    • Handle: RePEc:pra:mprapa:120684
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    File URL: https://mpra.ub.uni-muenchen.de/120684/1/MPRA_paper_120684.pdf
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    More about this item

    Keywords

    Nonprofit Organizations; Excessive Fundraising;

    JEL classification:

    • L13 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Oligopoly and Other Imperfect Markets
    • L22 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Firm Organization and Market Structure
    • L30 - Industrial Organization - - Nonprofit Organizations and Public Enterprise - - - General

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