Donors claim that information about the fund-raising methods used by a charity is important to them, and the press periodically high lights fund-raising scandals and abuses, which fuels negative public attitudes. However, there is little systematic empirical research about fund-raising practices. This study examined professional solicitor contracts using information provided by the Commonwealth of Pennsylvania's Bureau of Charitable Organizations. The nature of the contracts, the impact of these contractual arrangements on the amount of funds the clients ultimately receive, and the relationship between actual and predicted returns were examined. Results showed that charities using professional solicitors tended to be larger and concentrated in the advocacy, disease/disorder, and public safety subsectors. Most campaigns generated few contributions and resulted in a small return to the charity, with many charities receiving nothing from the solicitations made in their names. Solicitors compensated by fixed-fee rather than by commission generated more contributions and provided proportionately greater returns to charities.
Get full access to this article
View all access options for this article.
References
1.
American Institute of Certified Public Accountants
. (1996). Audit and accounting guide: Not-for-profit organizations. New York: Author.
2.
Bergen, B. M.
(1991). Assessing costs, risks, and results. In H. A. Rosso & Associates (Eds.), Achieving excellence in fund raising: A comprehensive guide to principles, strategies, and methods (pp. 190-202). San Francisco: Jossey-Bass.
3.
Billitteri, T. J.
(1998, March 12). Rethinking who can sue a charity. Chronicle of Philanthropy, 10, 1, 34-35.
4.
Blum, D. E.
(1997, January 23). Charities said to get little from hired solicitors. Chronicle of Philanthropy, 9, 25.
5.
Bush, B. H.
(1991). What fund raisers should know about the law. In D. F. Burlingame & L. J. Hulse (Eds.), Taking fund raising seriously: Advancing the profession and practice of raising money (pp. 200-218). San Francisco: Jossey-Bass.
6.
Cutlip, S. M.
(1990). Fund raising in the United States: Its role in America's philanthropy. New Brunswick, NJ: Transaction Publishing. (Original work published 1965 by Rutgers, the State University)
7.
Doble, J.
(1990, October 12-13). Public opinion about charitable solicitation and the law. Proceedings of New York University School of Law's Conference on Charitable Solicitation: Is There a Problem?New York: New York University School of Law.
8.
Glaser, J. S.
(1994). The United Way scandal: An insider's account of what went wrong and why. New York: John Wiley.
9.
Goodman, B.
(1998, April). Nonprofits are in an uproar over 98-2. Nonprofit Times, 12, 31-32.
10.
Guidestar Directory of American Charities
. (1996). Index. Williamsburg, VA: Philanthropic Research.
11.
Harrah-Conforth, J.
, & Borsos, J. (1991). The evolution of professional fund raising: 1890-1990. In D. F. Burlingame & L. J. Hulse (Eds.), Taking fund raising seriously: Advancing the profession and practice of raising money (pp. 18-36). San Francisco: Jossey-Bass.
12.
Harvey, J. W.
, & McCrohan, K. F. (1988). Fundraising costs: Societal implications for philanthropies and their supporters. Business and Society, 27,15-22.
13.
Herman, R. D.
, & Heimovics, R. D. (1994). A cross-national study of a method for researching non-profit organizational effectiveness. Voluntas, 5, 86-100.
14.
Kelly, K. S.
(1991). Fund raising and public relations: A critical analysis. Hillsdale, NJ: Lawrence Erlbaum.
15.
Khumawala, S.
, & Gordon, T. P. (1997, September). Bridging the credibility of GAAP: Individual donors and the new accounting standards for nonprofit organizations. Accounting Horizons, 11,45-68.
16.
Klein, K.
(1991). Fund raising at the grass roots level. In H. A. Rosso & Associates (Eds.), Achieving excellence in fund raising: A comprehensive guide to principles, strategies, and methods (pp. 253-260). San Francisco: Jossey-Bass.
17.
Montague, W.
(1989, June 27). Minn. charities said to get 33 pct. of money collected by fund raisers. Chronicle of Philanthropy, 1, 21-22.
18.
Moore, J.
(1992, December 15). Tougher code for fund raisers. Chronicle of Philanthropy, 5, 17, 20.
19.
Norusis, M.
(1993). SPSS for Windows: Base system user's guide Release 6.0. Chicago: SPSS, Inc.
20.
Ormstedt, D. E.
(1994). Government regulation of fundraising: A struggle for efficacy. New Directions for Philanthropic Fundraising: Financial Practices for Effective Fundraising, 3, 129-141.
21.
Riley v. National Federation of the Blind of North Carolina, Inc., 108 S. Ct. 2667 (1988).
22.
Rose-Ackerman, S.
(1982). Charitable giving and "excessive" fundraising. Quarterly Journal of Economics, 97,193-212.
23.
Rosso, H. A.
(1991). Achieving excellence in fund raising: A comprehensive guide to principles, strategies, and methods. San Francisco: Jossey-Bass.
24.
Royer, M.
(1989, summer). Please give generously, okay? NSFRE Journal, 17-20.
25.
Steinberg, R.
(1986). Should donors care about fundraising? In S. Rose-Ackerman (Ed.), The economics of nonprofit institutions: Studies in structure and policy (pp. 347-364). New York: Oxford University Press.
26.
Steinberg, R.
(1988-1989). Economic perspectives on regulation of charitable solicitation. Case Western Reserve Law Review, 39, 775-797.
27.
Steinberg, R.
(1991). The economics of fund raising. In D. F. Burlingame & L. J. Hulse (Eds.), Taking fund raising seriously: Advancing the profession and practice of raising money (pp. 239-256). San Francisco: Jossey-Bass.
28.
Suhrke, H. C.
(1993, July-August). What can be done about fund raising "fraud"?Philanthropy Monthly, 26,5-7, 11-13.
29.
Suhrke, H. C.
(1995, October). Fund raising and the telemarketing sales rule. Philanthropy Monthly, 28,19-25.
30.
Swords, P.
(1997, October 30-31). Form 990 as a tool for nonprofit accountability. Paper delivered at the Conference Governance of Nonprofit Organizations: Standards and Enforcement, New York University School of Law, National Center on Philanthropy and the Law.
31.
Warwick, M.
(1994). Raising money by mail: Strategies for growth and financial stability. Berkeley, CA: Strathmoor Press.
32.
Weisbrod, B. A.
, & Dominguez, N. D. (1986). Demand for collective goods in private nonprofit markets: Can fundraising expenditures help overcome free-rider behavior? Journal of Public Economics, 30, 83-95.
33.
Williams, G.
(1997). New rules for charity disclosure: IRS issues proposals to govern how charities must comply with law requiring wide access to tax returns. Chronicle of Philanthropy, 10,37-39,41.
