Factors associated with fundraising dependency among nonprofit organisations in Australia

Abstract

Despite the importance of fundraising to the nonprofit sector there has been surprisingly little research on fundraising as a revenue source in Australia. Research that has been conducted both here and internationally has focused on the cost of fundraising -the proportion of fundraising expenses to total fundraising revenue, and fundraising performance -the absolute or relative amount of money raised by organisations via fundraising. This paper examines why some nonprofit organisations are more dependent on fundraising as a source of revenue than others.The paper applies multivariate techniques to examine the influence that three broad sets of factors: organisational; revenue generation model; and fundraising approach, have on what we term 'fundraising dependency' -the percentage of a nonprofit organisation's total revenue that is derived from fundraising activities. It finds that fundraising dependency is associated with a range of organisational characteristics (e.g. size, geographical scope of the organisation and tax status); alternative forms of revenue generation (e.g. reliance on government funding and commercial venturing) and fundraising approach (e.g. whether professional fundraising staff are employed, the use of volunteer fundraisers and the number of fundraising practices used). The results support taking a multidimensional approach to understanding fundraising dependency.

The more you know, the more you give: Influence of online disclosure on European community foundations' donations

“…Given that the age of an organization can affect the level of charitable contributions (Saxton & Guo, 2011; Tinkelman & Mankaney, 2007; Trussel & Parsons, 2008; Zappalà & Lyons, 2006), to test the relationship between the depth of website disclosure and the level of donations, we chose to focus on United Kingdom and Italian CFs surveyed by the Community Foundations Atlas. Unlike other countries in Europe (such as Germany and France) where the experience of CFs traces back to the second half of the 1990s, Italy and the United Kingdom have hosted some of the first examples of CFs in Europe, dating back to the 1940s and 1960s, respectively.…”

“…The variable lnAge it indicated the number of years that a nonprofit had been operational. According to prior studies, because of reputation effects, nonprofits' ability to attract donations improves as they mature (Saxton & Guo, 2011; Tinkelman & Mankaney, 2007; Trussel & Parsons, 2008; Zappalà & Lyons, 2006).…”

Spenders or Savers? An Examination of the Reserves of Australian NGOs

“…Limited exceptions to this are found in research by Kent () and Buckmaster et al. (), who provided Australian data on the use of ratio analysis (including measures of reserves) as predictors of NFP financial risk and stability, by Zappalà and Lyons (), who studied NFP fundraising dependency, and by Booth (), who analysed the effectiveness of NGOs’ reserves in buffering against the GFC.…”

Government Funding to the NGOs

“…From the presented studies in this chapter, it has become clear that definite results are hard to draw to determine the impacts of government funding on NGOs and in fact these impacts depend upon a number of factors such as, age, size, sector and demography of an NGO. As according to Zappala and Lyons (2006), larger NGOs least relay on fundraising and more likely to have a diversified revenue base including revenue from government and commercial activities, whereas smaller organisations are more likely to depend on fundraising, moreover, organisations located in capital cities are also more likely to be dependent on fundraising revenue to carry for their activities.…”