Most voluntary, nonprofit organizations depend on donations. Success in gaining monetary contributions is essential for these entities to carry out their missions. Few nonprofit organizations are in a position to do “good” for their constituency, cause, or community, without doing “well” in securing the wherewithal necessary to survive, if not thrive. To meet this objective, nonprofit organizations often seek the assistance of professional fundraisers or “solicitors” to secure charitable contributions on their behalf.
Yet, research on nonprofit use of professional solicitors is limited. Accordingly, this research examines the circumstances that drive some nonprofit organizations rather than others to contract with solicitors for fundraising. Additionally, this study explores how the characteristics of these nonprofits affect: the minimum percentage of total contributions from the solicitation campaign promised to nonprofits in their contracts with solicitors, the amount of contributions received by the nonprofit as a result of the solicitation campaign, and the actual percentage of total contributions from the solicitation campaign received by the nonprofit. To understand these dynamics we analyze the use of professional solicitors by the population of nonprofit organizations that employed them in one state of the United States, North Carolina, for the 2016 Fiscal Year (N = 448). We combine these state-level data with U.S. national data from the Internal Revenue Service Form 990 to investigate empirically the recourse to professional solicitors among nonprofit organizations and the rates of return they negotiate and realize.
With these data we are able to test findings from much earlier literature which suggest that the use of charitable solicitors is an inefficient means of raising contributions, as nonprofits may receive only a small portion of the funds donated to solicitors on their behalf (Greenlee & Gordon, 1998; Harris, Holley, & McCaffrey, 1989; Keating, Parsons, & Alston Roberts, 2008). The fundraising literature indicates that donors want a significant portion of their contributions to be used for programs and services (Sargeant & Kähler, 1999), and yet our analysis shows that nonprofits only receive about 24 percent of the contributions raised on their behalf. This finding and the apparent disjuncture it suggests, between what donors want and what the use of professional solicitors yields, can be partially explained by considering Barber and Farwell’s (2016) discovery that as few as 35 percent of donors do any research prior to making their donation decision.
Our empirical analysis demonstrates the vagaries and nuances of engaging professional solicitors experienced by the population of nonprofit organizations that use them in a large U.S. state. Findings show that guaranteed-minimum rates stipulated in contracts, the amount of contributions earned by nonprofits as a consequence of these relationships, and the percentage of raised funds retained by professional solicitors vary across nonprofit organizations of different types, ages, and sizes. These results carry implications for nonprofit organizations that use paid solicitors, for they highlight questions regarding the continued use of solicitors despite the inefficiency of these relationships. The analysis provides a strong foundation to explore these important issues and raises new questions for future inquiry.
Geczi__Prentice__and_Brudney_2018.pdf 