For-Profit Fundraisers Make Nonprofits Market-Focused in Donors’ Eyes. with Kenneth Meier.
Abstract
The tension between social mission and organizational efficiency in nonprofit organizations is evident in various operational practices, particularly fundraising. In pursuit of greater efficiency, some nonprofits outsource this critical function to professional fundraising consultants, who are often for-profit entities. However, prior research on sector stereotypes suggests that the public tends to view business-like or profit-seeking practices in social services negatively. Consequently, hiring for-profit fundraisers may backfire for nonprofits. We test this hypothesis through a preregistered online experiment. The results show that donor contributions did not significantly decrease when a for-profit professional fundraiser represented a nonprofit nursing home, even under an aggressive pricing strategy. However, the use of a for-profit fundraiser led participants to perceive the nonprofit as more market-oriented than the typical nonprofit. We discuss the implications of this shift in public perceptions.