Prior research has established that it is valuable for members to have strong organizational identification with nonprofit service organizations. However, research has not examined whether and how members are influenced by other members of a nonprofit. This paper analyzes how peer identification influences member retention and donations using survey data and actual member behavior. It distinguishes identification with the organization from identification with peers. The theory-based econometric model shows that the effect of a member’s peer and organizational identification on the likelihood of he/she will remain a member depends on the member’s relationship stage. Organizational identification has a large effect on member retention in the earlier periods of membership. However, for members of eight years or more, the favorable effect of peer identification becomes larger. Results also show that peer identification has a negative impact on donations whereas organizational identification has a positive effect regardless of stage of the member-nonprofit relationship. This paper also introduces a new construct, peer identity overlap, which influences peer identification. The article discusses how nonprofit service organizations can foster support and affirmation among members, value alignment among members, peer identity overlap, and organizational identification, as well as manage different stages of the relationship.
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