The new world of philanthropy: How changing financial behavior, public policies, and COVID-19 affect nonprofit fundraising and marketing
Abstract
Evolving financial behavior, an unpredictable public policy atmosphere, and an unparalleled global pandemic have collaborated to disrupt nonprofit fundraising. The COVID-19 pandemic alone exacerbated consumer demands for nonprofit services while curtailing nonprofit organizations' ability to fundraise. Without fundraising, nonprofit organizations cannot achieve their mission or support their causes, leading to a precarious situation for societal well-being. Meanwhile, consumers are changing their financial behaviors, with younger generations often going cashless. At the same time, governments continue to change policies that affect nonprofit organizations. In keeping with the transformative consumer research movement, the present study provides a conceptual framework for the state of nonprofit fundraising amid the challenges associated with changes in financial behavior and public policy, coupled with the effects of the global pandemic. Marketing strategies for fundraising success are presented to aid nonprofits going forward and serve societal interests.
1 INTRODUCTION
Not a single nonprofit organization (NPO) could have predicted that a global pandemic would thrust most of them into a state of chaos with minimal grasp of how to effectively fundraise, leaving one in three of them in danger of shutting down (McCartney, 2020). This challenge was exacerbated by changing donor behavior and a fluctuating political climate that heightened their fundraising woes and revealed an unprepared sector of the economy unable to financially sustain its mission. As a result, NPOs find themselves in an unprecedented situation facing three external factors that affect their fundraising efforts today and will for decades to come. First, NPOs are experiencing a shifting donation landscape based on changes in financial behavior, demonstrating declining rates in charitable giving across diverse groups of donors (Wiepking & Bekkers, 2012). For example, research shows that younger target audiences rarely carry cash or write checks, leading to a dampening effect on charitable giving (Ross & Kapitan, 2019).
Second, changes in public policies related to shifts in political leadership are influencing fundraising abilities and strategies. For example, in 2017 the U.S. Congress passed the Tax Cut and Jobs Act, which placed a $10,000 cap on state and local tax deductibility and restrictions on itemized deductions. This had a net effect of reducing the deductibility of individual charitable giving. Four years later, the U.S. Congress passed the COVID-19 Economic Relief Act, which suspended those deduction limits. The impact of such policies and policy shifts on NPOs can be dramatic.
The third factor is the COVID-19 global pandemic that provoked a public health and economic crisis in early 2020. The pandemic took a significant toll on the capacity of NPOs, which immediately began experiencing increased demands for food, shelter, and other basic necessities (Deitrick et al., 2020). The health crisis required human distancing, which necessitated curtailing or canceling traditional fundraising events such as galas, dinners, auctions, running events, golf tournaments, and donor recognition gatherings. This created, and still creates organizational challenges that must be met including moving programs online because of the necessity to transition from face-to-face services (Prentice et al., 2020). Because most NPOs rely on program revenue and service fees, countless organizations were unable to generate sufficient income due to pandemic forced closures (Shi et al., 2020). Since the pandemic began, the nonprofit sector has lost more than 900,000 jobs (Center for Disease Philanthropy, 2021) creating financial distress for NPOs, including funding concerns from individual donations, fee-for-service revenues, and government and foundation grants (Maher et al., 2020). By early 2022, the contagious rates decreased due to several factors, most prominently the widespread availability of vaccinations. As a result, most countries have progressively rolled back some of the COVID-related regulation including eliminating confinements, discontinuing the use of protective face masks outdoors, and allowing events such as galas and concerts. Despite the positive progress, the COVID-19 pandemic still constitutes an extraordinary event for world health, and most countries remain in a state of emergency with public health (World Health Organization, 2022).
Motivated by the calls for more development of conceptual papers (Belk et al., 2019; MacInnis, 2011; Yadav, 2010), the following proposed conceptual framework is designed to identify the factors that have affected fundraising up to now and address the gaps in understanding what will shape fundraising in the future. To do so, the authors apply the general conceptual goal of “envisioning” which requires a novel framework and new perspective (MacInnis, 2011), with a specific conceptual goal of “identifying.” The goal of identifying is designed to make nonprofit practitioners as well as interested researchers aware of what questions the new framework answers. This approach is leveraged “to see that something exists” by making us aware of what we have been missing “and why it is important” (MacInnis, 2011, p. 138). In applying the conceptual goal of “identifying,” the authors have conducted divergent thinking, questioned assumptions, searched for hidden outliers, and engaged in introspection to develop a proposed conceptual framework to assist nonprofit fundraisers.
Based on the descriptions of conceptual contributions in marketing by MacInnis (2011), this article aims to envision the future of NPOs' fundraising and its effect on consumer well-being to answer the following question: How can NPOs effectively and efficiently fundraise amid a global pandemic, changing giving behaviors, and uncertainty in public policy? More specifically, we ask the following questions: (1) how has the pandemic affected individual and corporate donation behavior? (2) how has the pandemic affected the interplay between financial behavior and public policy? (3) how has this interplay affected what NPOs need to do for future fundraising efforts? and (4) what role can marketing play in designing strategies for NPO fundraising in light of the global pandemic? The remainder of the paper examines the nonprofit sector from a TCR perspective by considering only NPOs that have a mission related to betterment of society and carry an IRS designation of 501(c)(3).
To begin addressing these questions, we propose the future of fundraising starts with the changing financial behavior among individuals and corporations. Factors affecting personal financial changes include donation behavior, generational aspects, and individual differences. Factors affecting corporate donation behavior relate to how firms grapple with implementing corporate social responsibility (CSR) and cause-related marketing efforts, while also strengthening the consumer-brand relationship through their strategic partnerships with NPOs. Variations in public policy, such as changing tax laws and regulations on donations, also affect fundraising. Finally, we contend that the global pandemic affects both financial behavior and policy related to NPOs and fundraising. The interplay between changing financial behavior, public policy, and the effects of the pandemic are forcing NPOs to adapt and change their fundraising strategies. Marketing plays a role in these strategies as well and must exert influence on the future of nonprofit fundraising if NPOs are to survive. Kumar and Chakrabarti (2021) urged researchers to develop a model of charitable giving which is more relevant to the current context of volatility and uncertainties. While there is an abundance of research on consumer donation behavior, a nascent research stream on the effect of public policies on NPOs, and emerging literature on the effects of the global pandemic, a significant contribution of this paper is integrating these streams of research into a cohesive, unified model and proposing some next steps for researchers and practitioners alike. The conceptualized model (see Figure 1) demonstrates the effects of all three factors on NPO fundraising, which critically affects consumer welfare.
Epistemologically, the framework is based on approaches to development of conceptual papers as detailed by MacInnis (2011) and Yadav (2010). Our conceptual framework relies on the strategy of interrelations “by creatively integrating bodies of knowledge from one or more substantive areas to generate new insights and research opportunities” (Yadav, 2010, p. 6). Development and validating such a framework are crucial for those charged with understanding best practices for nonprofit fundraising. It is imperative that empirical support be gathered for this framework in order to arm nonprofit managers and researchers with the strategies and tactics necessary to implement better fundraising programs for future humanitarian needs and related policies.
This article adopts a transformative consumer research (TCR) perspective, which integrates research across the social science and business disciplines to broadly inform researchers and practitioners of consumer behavior, marketing, and public policy (Davis & Pechmann, 2019). Such an approach enables us to recognize and examine the challenges and opportunities raised by changing financial behavior, fluctuating public policies, and the effects of the pandemic on nonprofit fundraising. Keeping with this perspective, our work embodies the qualities and objectives of the TCR movement by integrating these elements into a framework that identifies novel challenges for the nonprofit sector. In doing so, it contributes to the existing literature on consumer affairs concerning the sector in several ways. First, the fundamental goal is to offer fundraising guidance to NPOs in the new-normal pandemic world by better understanding individual and corporate behavior from a giving perspective. In particular, this article lays out a research agenda for engaging and educating donors as the world emerges from the pandemic. Second, policy implications affecting NPO funding and fundraising abilities are identified, exposing a gap in the research on the effects of policy on fundraising. Third, we present marketing as an underlying strategy to achieve fundraising goals that alleviate financial strains posed by the COVID-19 pandemic, discussing opportunities where NPOs can leverage marketing to enhance their fundraising initiatives. Lastly, in concert with the concept of the TCR movement (Davis et al., 2016), we identify future research opportunities to explore more profound ways to assist the future of NPOs' fundraising and its effects on consumer well-being.
2 FINANCIAL BEHAVIOR AND THE NONPROFIT INDUSTRY
Charitable giving in the United States reached an all-time high in 2020, with Americans donating $471 billion (Lilly Family School of Philanthropy, 2021). However, the number of U.S. households contributing to an NPO was less than 50%, the first time it has dropped to less than half in 20 years. This included reductions in the giving rate regardless of socio-demographics, which was largely influenced by the economic recession sparked by the global pandemic. Trust in NPOs is also declining, particularly among Millennials (Davern et al., 2015).
Explaining or predicting donation behavior can be challenging. Factors that have been found to affect one's inclination to donate to an NPO include: (1) motivations such as altruism, empathy, and guilt; (2) social norms; (3) socio-economics, financial ability, and past giving history; and (4) message delivery features such as framing and content (Sargeant, 2014). Like individual donors, corporations and other for-profit organizations commonly support nonprofit entities for various reasons. Companies engaging in charitable giving or CSR walk a line of “ethical subjectivity” between altruism and self-interest (Eger et al., 2019) and must balance the costs and benefits of such giving (Jeong & Kim, 2019). In sum, the factors affecting individual and corporate donor behavior from a financial behavior perspective warrant further analysis.
2.1 Individual donation behavior
Most of what is known about individual donor behavior includes research in three broad streams: (1) the socio-demographics and other correlates of individual donor behavior; (2) the influence of technology on individual donor behavior; and (3) the donor-organization relationship. Other factors that affect individuals' motivation to donate to an NPO include emotions, altruism, social influence, impression formation, and construal (de Peyrelongue et al., 2017). A major driver, for example, is empathy. Empathetic concern positively affects the donation decision, however people with deep empathic concern are likely to donate smaller amounts to multiple NPOs rather than providing greater support to just one (Verhaert & Van den Poel, 2011a). When it comes to acting altruistically, one motivator is how effective the donation can be. That is, donors may measure the value of a contribution with reference to its impact (Echazu & Nocetti, 2015). In an effort to understand motivations for donation behavior, extensive research has focused on the effect of individual differences.
2.1.1 Individual differences affecting donor behavior
An individual's identity affects not only how much they give but which NPOs they support. For example, those who are older are more likely to give to religious organizations; those who are religious are more likely to give to international causes, animal charities, and aid organizations; with political ideology also influencing giving (Paarlberg et al., 2019). Research has also found individual differences such as income (Jones & Posnett, 1991), education (Mears, 1992), age (Peterson et al., 2018), and gender (Nichols, 1998) are strong predictors of donation levels. Generational aspects also affect donor and financial behavior. For example, while Millennials are less likely to make any donation at all (Koczanski & Rosen, 2019), when they are able to see the impact of their contributions on others (Lewis, 2019), it positively affects their intention to donate, more so than other generations (Gorczyca & Hartman, 2017).
More specifically, research in the last 20 years has found that pre-Baby Boomer generations (i.e., the Greatest Generation and the Silent Generation) donate to both religious (57.6%) and secular (65.7%) causes and gave to 2.4 different NPOs, on average (Brown & Kou, 2011). This generation is motivated by caring for others. Baby Boomers, meanwhile, give to secular causes most often, and are motivated to help people meet basic needs. Contrasting these two is Generation X, which prefers to give through “nontraditional ways” such as social entrepreneurship (Brown & Kou, 2011, p. 206). While Gen X also wants to help people, this cohort is equally motivated by improving their communities. On the other hand, Millennials are motivated by efforts to “change the world” and make it better for themselves and are not as interested in caring for others (Brown & Kou, 2011; Konrath et al., 2011). This could be attributed to Millennials' expectation of reciprocity in that while they want to do good, they also expect some return benefit (Gorczyca & Hartman, 2017). This motivational difference, coupled with the finding that Millennials score lower on measures of empathy (Konrath et al., 2011; Mesch et al., 2009), “suggests that engaging this generation at this point in their lives might be more successful if appealing to self-interest rather than by stressing responsibility or duty to care for others” (Brown & Kou, 2011, p. 207).
Though significantly less in number, some empirical studies have examined donor behavior in the global pandemic. During the pandemic's peak, positive donation behavior demonstrated by others was more likely to influence participants' initial decisions. However, such differences disappeared after the peak since the spread of positive donation behavior and social anxiety significantly decreased along with the abatement of the pandemic (Li et al., 2021). This aligns with research that found social responsibility guilt enhances the sense of responsibility in an individual to donate (Basil et al., 2007). Research examining the effect of the pandemic on donation behavior also found the message frame impacted individuals' donation intentions depending on their political ideology. Experimental studies have found that politically conservative consumers respond more positively to the identifiable victim (vs. statistical victim) message frame, while politically liberal consumers were indifferent to both frames (van Esch et al., 2021). And most recently, research found that individual differences such as greed, selfishness, narcissism, materialism and self-justification lead to larger donations when donors were thinking about COVID-19 and mortality (Jin & Ryu, 2021).
A systematic literature review of consumer donation behavior to glean “the essence of donor behavior” yielded a model wherein individual dimensions of the donor (some previously discussed here), dimensions of the charity or nonprofit organization (including the type of charity, the brand positioning, and its relationship marketing strategy), and elements of the external environment (including social norms, peer pressure, and tax benefits) interact to drive donor behavior (Kumar & Chakrabarti, 2021). Those authors call for additional research in five themes: the donor “customer” journey; online donation platforms and other effects of technology; trust building and value co-creation; generational effects, particularly among Millennials; and CSR. Each aligns with the model proposed in the present paper. Furthermore, the researchers call for a model of charitable giving to be developed “from a theoretical and methodological perspective with more specificity” (Kumar & Chakrabarti, 2021, p. 36). By developing a conceptual framework that includes the role of corporate giving and public policy, the model presented here extends their work to include other key aspects that affect fundraising.
2.1.2 Donor-brand relationship
Brand relationship theory (Fournier, 1998) may explain donation behavior because customer loyalty strategies such as soliciting feedback, providing updates, and offering value to donors (such as through a participatory fundraising event) have improved donations and long-term donor relationships (Strahilevitz, 2011). In addition, asking individuals how much time they would like to donate instead of how much money they would like to give strengthens the organization-donor relationship and increases the amount of money they donate over time (Liu & Aaker, 2008).
When it comes to donor decision-making and the NPO brand, research findings indicate that brand salience is positively related to brand choice intention through the mediating effect of brand attitude (Gregory et al., 2020). Specifically, relationship benefits, service quality, trust commitment, and satisfaction are antecedents of donor-perceived relationship quality (Shabbir et al., 2007), which affect donation intention. In addition, quality of service, donor perceptions of feedback received, and donor beliefs about the impact of their gifts enhance donor retention (Sargeant, 2001). Still, other research has found that a sense of belonging (Drezner & Pizmony-Levy, 2021), relationship commitment (Sargeant & Lee, 2004), and emotional engagement (Sargeant et al., 2008) were linked to individual giving behavior. Taken together, this literature consistently reveals the importance of the fit between the NPO and the consumer's needs, interests, values, and priorities. As consumers evolve, additional research into donor psychographics is needed to enable NPOs to modify their missions and interactions so as to meet consumers where they are. In general, NPO branding appears to be an area fruitful for future research in the context of the donor-brand relationship.
But individuals are not the only types of donors. Nor is the donor-brand relationship the only significant relationship in the nonprofit industry. Corporations have long been involved in nonprofit giving for both altruistic and accounting reasons. Today's firms must also consider the effect their charitable giving has on their relationship with their consumers in their own consumer-brand relationship.
2.2 Corporate donor behavior and NPOs
While there is less research on motivations for corporate donor behavior, studies have uncovered a variety of determinants to help explain corporate financial behavior related to NPOs. Importantly, consumer-oriented firms and those with higher name recognition give more through their charitable foundations than industrial (business-to-business oriented) firms (Peterson & Su, 2017). Although total giving did not fluctuate with economic cycles for these firms, industrial firms gave more during a downturn, while consumer firms gave less. Understanding this behavior is crucial as NPOs attempt to emerge from the pandemic-generated recession related to business shutdowns in the first and second quarters of 2020.
Corporate stability has also been found to be a factor in a firm's approach to philanthropy. For example, the amount of growth and turnover among employees and the organization's ownership both dictate corporate giving behavior, with private organizations giving significantly more to religious causes than public corporations (Peterson et al., 2021). Firms with large gains in total employees give more to educational causes, while organizations in industries with high turnover give more to human rights causes. Gender appears to be another factor as studies have shown that firms with more women on their board of directors give more to charity (e.g., Zhang et al., 2018).
Governmental policy initiatives also appear to be an important factor in corporate financial behavior related to NPOs. A survey of nonprofit managers in 2020 found that virtually no NPO would reduce its expenses for fundraising as government support increased. However, they would do the reverse and increase expenditures if government support decreased (Kim & Mason, 2020). Moreover, research analyzing more than 5000 nonprofit arts and cultural organizations found that government support at all levels increases corporate support (Krawczyk et al., 2017).
2.2.1 Brand building and corporate social responsibility
Corporate sponsorship and CSR as philanthropic behaviors have become mainstream practices. Still, while naturally intending to help the nonprofit, sponsoring organizations may also expect to benefit from these charitable donation efforts (Chalmeta & Viinikka, 2017). In general, consumers believe cause-related marketing efforts are an excellent way to raise money for the cause (Ross et al., 1991). Most consumers have purchased a product to support a cause, resulting in favorable attitudes toward the firm and the charitable organization, with women exhibiting more favorable attitudes than men.
This is why corporations, and their foundations, engage in philanthropy strategically to enhance the brand's reputation, and increase purchase intentions and loyalty (Holt, 2015). This is particularly true for firms with a positive reputation already and more so during an economic downturn than in a more prosperous time (Peterson, 2018). Firms with a negative reputation, on the other hand, did not benefit during an economic downturn. A good fit between the corporation and the cause can also enhance the beneficial effects of corporate philanthropy when the donation level is high (Chang & Liu, 2012).
Yet, consumers may also evaluate donations depending upon how much effort they believe the corporation put into them. For example, donations of time are judged more effortful than monetary donations, leading to a more altruistic view of the donor corporation (Langan & Kumar, 2019). Further, the impact of charitable giving on firm performance might not be uniformly positive. One study found a positive correlation between charitable contributions, firm performance, and market value (Hategan & Curea-Pitorac, 2017), while another found that as giving increases, all stakeholders will be satisfied and view the efforts positively. Still, as the giving increases to higher levels, the reactions by consumers versus other institutional stakeholder groups may differ, causing a decrease in firm performance (Gao et al., 2019). However, corporate philanthropy can be more predictable than the effects of public policy and changing governmental laws on donations and NPO fundraising efforts. Therefore, these effects must be examined.
3 THE EFFECTS OF PUBLIC POLICY ON FUNDRAISING
Public policies can affect those raising funds as well as those giving donations in a myriad of ways. Examples include initiatives that impact political campaigns and tax regulations, laws governing NPO financial operations, the desires or needs for public-private partnerships to fill gaps in civil society, and agreements that affect international relations. Fortunately, there is research on the relationship between policy and fundraising that typically analyze it from three perspectives: (1) a macro view related to political ideology; (2) a meso view related to organizational responses to policy; and (3) a micro view related to individuals' donation behavior as a response to policy.
At a macro level, an important funding source of NPOs comes from international humanitarian and development agencies. Studies have shown that such international agencies are influenced by different political or religious ideologies that shape their understanding of altruism and development (Buthe et al., 2012). For example, studies have demonstrated that support from Chinese and United States international agencies (i.e., the Chinese Communist Party and USAID, respectively) underscore a political interest in the country being supported (Richardson, 2021). In another example, research has found that conservative governments are prone to support faith-based NPOs more than liberal governments (Audet et al., 2013), underscoring the effects of political ideology on fundraising efforts.
At a meso level, research has focused on the effect of funding regulations on NPO activities. In sum, governments at all levels have developed different initiatives to support and regulate NPO activities, including fundraising. Examples of such policies include creating regulatory bodies that develop standards for NPO operations such as the Fundraising Standards Board in the UK (Harrow, 2006), employing fiscal policy that dictates how NPOs can leverage resources (Lee & Woronkowicz, 2019), and implementing laws that regulate NPO work practices, like the U.S. Federal Trade Commission's regulation on public service announcements (Shanajan et al., 2010).
At a micro level, research has focused on how individuals' donation behavior responds to both political ideology and policy regulation. There is evidence that regulations affecting tax deductions impact consumer giving behavior, such that givers prefer to donate money rather than time due to the tax incentive (Feldman, 2010). For example, in the United States, the Tax Cut and Jobs Act of 2017 had, among other provisions, placed a $10,000 cap on state and local tax deductibility, making the future of charitable giving uncertain (Bivin et al., 2018). In fact, while overall donations increased in 2018 after the Act was passed into law, according to Giving USA (2019), individual giving declined for the first time in 5 years, as did total giving when adjusting for inflation.
Until the Jobs Act was passed in 2017, the nonprofit industry had been successful in keeping Congress from limiting charitable deductions available to high-income earners and in getting the 2006 Pension Protection Act passed that allowed older individuals to donate more funds from their Individual Retirement Accounts (IRAs) to lower their tax burdens (Abramson, 2016). In addition, constant public policy changes at federal, state, and local government levels intensify the need for NPOs to mobilize policymakers to direct their attention to policies that positively address their missions and fundraising goals. In response to the Jobs Act, the U.S. Congress passed the COVID-19 Economic Relief Act in 2021. Also known as the Cares Act, this law suspended the donation cap that had been enacted in 2017. Moreover, much of the federal budget cuts to NPOs during the Trump administration, along with cuts to Foreign Aid, further intensified NPOs' fundraising needs from private and corporate donors.
Various tax, spending, and regulatory policies have always affected NPOs and their fundraising efforts, beginning with policies determining which organizations can even claim nonprofit status (Abramson, 2016). For example, in 2009, the U.S. Congress passed the Serve America Act, which expanded national service programs and funded nonprofits in growth and organizational capacity. And in 2021, the Internal Revenue Service in the United States issued its “2021–2022 Priority Guidance Plan” that affects NPOs in terms of group exemption letters, allocation of expenses for unrelated business taxable income, excise taxes, and donor-advised funds, as well as making regulatory recommendations for NPOs with 509(a)(3) nonprofit designations that function in support of another NPO with the more standard 501(c)(3) designation (Internal Revenue Service, 2021).
In addition, policies not explicitly aimed at the nonprofit industry can also affect donations, as fluctuations in marginal tax rates influence how much individuals can and are willing to donate. Research shows that tax rates and giving incentives are negatively related (Abramson et al., 2006). Various government entities can enact policies that affect fundraising. The legislature in the state of Texas, for example, enacted the Texas Research Incentive Program that offered matching funds in an effort to incentivize private-sector giving to public universities, resulting in an increase in not only private donations but also state grants (Hu et al., 2021). Such regulations are not limited to the United States. In China, the government enacted fundraising policy reforms in early 2016, resulting in a more supportive nonprofit environment, but mixed results for fundraising (Hu & Guo, 2016). Much like the effects of corporate donation behavior, the impact of public policy on fundraising strategies and successes warrants more research, as do the effects of the global pandemic.
4 THE GLOBAL PANDEMIC AND FUNDRAISING
COVID-19 is a highly contagious infection caused by the novel SARS-CoV-2 and has mutated into different variants with the ability to spread faster and cause greater harm to human life. It is a disastrous event that affected all countries and took a significant physical, economic, social, and cultural toll on human lives. The United Nations defines a disaster as “a serious disruption of the functioning of a community or a society involving widespread human, material, economic or environmental losses and impacts, which exceeds the ability of the affected community or society to cope using its own resources.” In the United States alone, as of May 2022, more than a million people lost their lives to this pandemic, while the global death count continues to rise well over six million (Our World in Data, 2022).
The pandemic also posed an unprecedented challenge to the global economic systems and related labor markets. Lockdown mandates designed to help contain spread of the virus forced millions of businesses across the globe to close their doors temporarily or even permanently, forcing more than 114 million people into unemployment in 2020 alone (International Labour Organization, 2021), while close to half of the world's labor force of 3.3 billion were left in a state of shock fearing for continued job losses (World Health Organization, 2020). The COVID-19 pandemic precipitated the worst economic crisis since the Great Depression in the 1930s and the 2008 global financial crises combined. Millions of people were thrust into extreme economic poverty around the globe, widening the economic and social disparities within and between nations, with its impact believed to be felt for decades to come (Reuters, 2020). Substantial unmet needs continued through the end of 2021, with 20 million households reporting having little to eat, and 10 million households not having money for rent. As of early 2022, nearly three million fewer individuals in the United States have employment than before the pandemic (Center on Budget and Policy Priorities, 2022). As the pandemic subsides, the economic and social consequences remain. For example, world unemployment is still at its maximum rate of 6.5%, with no sign of significant reduction (World Population Review, 2022).
Unlike an economic contraction or a natural disaster (e.g., the 2021 Haiti earthquake), the pandemic provoked funding insecurity to the entire humanitarian sector, particularly to NPOs relying on grants and donations from government or corporations, as well as decreasing individual volunteering. Given the global magnitude of losses attributed to the pandemic, NPOs were faced with greater short- and long-term demands across all aspects of human life from health support and food shortages to lack of educational access and support. Despite greater demands for their services, NPOs experienced similar strains on business functions as other sectors and had less financial and human resources to tackle these exorbitant all-around needs created by the pandemic.
All governments across the globe were initially in distress, focusing their funding programs on protecting the lives of their own population. In addition, lockdown mandates limited NPO's ability to generate revenue (Johnson et al., 2020). Social distancing policies also decreased individuals' motivation to volunteer in-person. As a result, the financial stability of most NPOs was threatened. In fact, 75% of NPOs reported their revenue streams and ability to fundraise were negatively impacted by the COVID-19 pandemic, forcing reductions to their budgets (Nonprofit Leadership Center, 2020). Numerous NPO employees were furloughed, fired, or working remotely due to the stay-at-home orders, with 37% of nonprofits experiencing reduced staffing (Wealthengine, 2021). Staff reduction meant limited resources to cater to growing human demands, interact with donors, and organize events, affecting how NPOs could raise funds.
4.1 Effects on individual donation behavior
While individuals had to modify their behavior considering the pandemic, this change also directly impacted how NPOs raised money to support individuals and the community. Following GoFundMe data citing “covid” in the description, one study found that most campaigns supported business, family, health, or community-related matters, indicating the discrepancy between community needs and support from governments (Elmer et al., 2020). That is, the GoFundMe fundraising campaigns related to the pandemic were created to bridge the gap between what was needed and what governments were providing. Additionally, the entities starting the fundraisers included community members, friends, and third parties.
Third-party involvement suggests that community groups may have rallied around a common cause to support each other, led by small groups indirectly impacted by the cause. Early research suggests that an increase in crowdfunding activity may be a signal for “emerging needs and societal sentiment for communities in acute distress that could be used by governments and aid organizations to guide disaster relief and policy” (Saleh et al., 2021, p. 9). At the same time, though, high-net-worth donors accounted for more than $5.8 billion in donations in 2020 (Center for Disease Philanthropy, 2021). This accounts for more than 25% of all philanthropic donations that year. Not surprisingly, NPOs whose missions related to human services or health care received the most contributions.
While fundraising was affected, some NPOs found that their causes were indirectly impacted by the global pandemic. For example, most campaigns in the United States resulting from the pandemic focused on living expenses, lost wages, and food (88%), while a minority (3.3%) focused on medical supplies (Rajwa et al., 2020). This focus on community aid aligns with numerous NPOs' missions, allowing them the ability to lean on this indirect impact to gain support from individuals in light of the crisis. In fact, individuals who typically donate to medical causes were more likely to engage in altruistic behavior related to the COVID-19 pandemic, and organizations with active involvement in or for a cause resulted in a greater likelihood of obtaining a donation (Maftei, 2020).
Pandemic giving did not correlate with pre-pandemic donor behavior. For instance, while trust in nonprofits is key in forming relationships with donors, its impact on charitable giving has been mixed during the pandemic and is dependent on whether individuals give online or offline. For example, research showed trust did not significantly affect attitude toward online donation considering the pandemic (Bin-Nashwan et al., 2022). On the contrary, trust increased offline giving intentions with an interaction found between warmth-focused messages and the visual typeface design strategy used in donation appeals (Huang & Liu, 2020). Instead, key intrinsic factors such as religiosity were significant predictors for donor attitudes. These results are echoed in a systematic review highlighting how intrinsic motivations such as altruism, empathy, and guilt are closely related to extrinsic motivators like reputation, image, and reward motivation (Kumar & Chakrabarti, 2021). And finally, with COVID-19 causing death rates to soar worldwide, the effect of mortality salience was found to predict charitable giving and prosocial spending as an anxiety-buffering coping strategy (Jin & Ryu, 2021). These intrinsic and extrinsic motivations are central to how donors view themselves, which in turn shapes their giving behavior.
4.2 Effects on corporate donation behavior
The worldwide COVID-19 pandemic had immediate and dramatic effects on corporate giving. As soon as it reached worldwide status in March 2020, the Council on Foundations began calling on foundations and other granting organizations to pledge to relax or remove the limits on current grants, while also making new grants that prioritize health and economic impacts caused by the pandemic more accessible to emergency response funds in communities (Council on Foundations, 2020). More than 800 organizations signed the pledge. Loosening of these restrictions gives charitable organizations more flexibility in using donated funds to address the most urgent needs arising from the crisis. The result was that foundations did increase their overall giving in 2020 by 17% (Lilly Family School of Philanthropy, 2021).
One study involving the top 25 granting organizations found that nearly all had committed money to rapid response emergency funds, with an average commitment of $35 million, and 13 of the 25 said they would maintain or increase their level of giving (Theis & Daniels, 2020). Corporations also directly changed how they give by funding organizations working in what were perceived to be the most urgent needs in health and well-being, disaster relief, and education (CAF America, 2021). Further research found that corporate foundations and corporate giving programs accounted for 44% of total funding for COVID-19 initiatives in 2020 (Center for Disease Philanthropy, 2021).
Foundations and endowments also scaled up during the global pandemic to effectively meet the circumstances by increasing grantmaking, reducing red tape, and extending greater flexibility for NPOs (Reid & Broadhurst, 2021). In several cases, they have also allowed the organization to convert current funds for use in general operations to tackle COVID-19 related responses. Some are also working to reduce lag time in reimbursements, minimizing red tape, and ensuring that funds flow quickly to the targeted individuals and organizations (Reid & Broadhurst, 2021).
In addition, numerous corporations changed their giving strategies in response to the pandemic, chiefly to send money where it was most urgently needed and give the NPOs on the ground more flexibility in implementing the funding. Research has also shown that charitable giving does not hurt established brands (Robinson & Wood, 2018), rather it can improve brand reputation and employee morale (Peterson et al., 2021). A majority of consumers also consider corporations' charitable giving when making purchases and believe companies have a responsibility to give back (Chalmeta & Viinikka, 2017).
In the future, corporate donors should consider four strategies: (1) provide unrestricted funds and flexibility to the recipient organizations wherever possible, to allow those closest to the need to determine what those needs are and how best to serve the communities; (2) continue to give consistently, both in times of economic prosperity and during downturns, to provide stable funding and improved sustainability for nonprofits to weather financially difficult times; (3) promote their donation behavior and partnerships for their own benefit and that of the NPO, while ensuring that consumers know they have not sacrificed product quality to make those donations; and (4) engage authentically with the organizations and causes which they choose to support, which should help attract and retain employees, improve morale, and increase brand attitudes among consumers who have come to expect companies and brands to support causes.
4.3 Effects on nonprofit operations
Just as giving has changed because of the pandemic, how nonprofits operate has also shifted. Most NPOs reported adverse effects caused by the pandemic on demand, costs, revenue, and programming (Martin et al., 2021). However, the negative impact was dampened by increased support from individuals, the government, and charitable foundations, including loosened restrictions on how funds could be used and the provisions of the Paycheck Protection Program provided by the Small Business Administration that provided loan forgiveness. The result is coping with such disruptions in primarily three ways: (1) adjusting operations and financing; (2) expanding service focus, and (3) introducing new activities and initiatives (Prentice et al., 2020).
NPOs have adapted their operations to conform to mandated COVID-19 safety protocols and distancing guidelines. Most shifted operations to a virtual format, if possible, including teleworking and virtual meetings (Akingbola, 2020). As a result, donors offered flexibility in allowing the NPOs to convert the project-specific grants to general operating support. Even though NPOs continued to serve the same constituencies, they had to adapt to a greater degree and broaden their service focus to include newer and different constituencies (Besel et al., 2011). Often NPOs partnered with local governments and other NPOs to expand their existing programs and deliver ad hoc programs to benefit the larger community. For example, a regional community foundation partnered with the local United Way affiliate to raise funds specifically for COVID relief, distributing more than $550,000 to support families, businesses, and NPOs in need (One Valley Community Foundation, 2021).
At the same time, NPOs were forced to be innovative and diversify in developing new programs and initiatives for additional constituents (Ely et al., 2020). Introducing new activities and initiatives augmented original offerings to be COVID-19 specific. Frequently, they are collaborative projects with county and city governmental agencies or other nonprofit partners. Under strategic philanthropy, ideally, missions are aligned, long-term relationships evolve and mutual gains are realized by business and society. For example, the American Heart Association's (AHA) response to the pandemic was to lean on its mission to serve the population better, explicitly focusing on volunteering on the frontlines of the healthcare response, as well as disseminating accurate science-based information (Elkind et al., 2020).
5 FUTURE FUNDRAISING STRATEGIES AND MARKETING'S ROLE
The present study explores the future of fundraising by NPOs and its effect on consumer well-being given the changes in donor behavior and public policy due to the COVID-19 pandemic. For NPOs to effectively fundraise moving forward, there must be a recognition that donor behavior and public policy will remain in a state of change as the pandemic evolves into an endemic, which will stay part of the foreseeable future. This means that consumer priorities and needs will constantly evolve, while donor behavior will remain transitional due to individual differences and a reexamination of corporate giving strategies. All these changes present unique opportunities for NPOs to revamp their fundraising efforts with groundbreaking approaches to increase giving behavior. Understanding how Millennials manage their money, for example, will be vital to engaging these individuals and creating new donors. Fundraisers must also understand that corporations are considering their brand image when implementing CSR programs. This means NPOs must comprehend branding and corporate brand strategy to find complementary efforts between firms and the NPO in order to ensure a correct fit from the consumers' perspective (Barone et al., 2000). Firms are willing to take a position on social issues (Chalmeta & Viinikka, 2017), and Millennials view companies that do not take a position on social issues with less regard than those that do (Chatterji & Toffel, 2018). Therefore, savvy NPO fundraisers must be aware of the desire for firms to implement CSR and cause-related marketing programs that enhance their brand.
Despite the challenges NPOs face today with changing financial behavior, fluctuating public policies, and a global pandemic, fundraising must be successful if individuals in need are to be served. Therefore, to be successful in future fundraising initiatives, it is imperative that NPOs (1) make strategic adjustments based on changing consumer and corporate financial behavior, (2) leverage data analysis to drive strategies and tactics, allowing NPOs to measure the impact of fundraising efforts, (3) clearly communicate the value their NPO delivers to both beneficiaries and donors while equally engaging and educating all stakeholders for sustained support, and (4) adopt and implement best practices in brand strategies and brand management to positively affect brand equity and brand loyalty.
5.1 Strategic adjusting based on changing financial behavior
As Millennials and Gen Z become the subsequent significant cohorts of donors, NPOs must adjust to new audiences who might not trust the nonprofit industry and therefore do not respond to traditional fundraising methods. Thus, NPOs should take advantage of developing giving vehicles, including implementing cause marketing, crowdfunding, and impacting investment opportunities created to generate positive social impact along with financial return (Osili, 2019). For example, in December 2020, the Salvation Army introduced a cryptocurrency option for donors and received 13 donations almost immediately. And the American Cancer Society has partnered with The Giving Block, a Washington, D.C.-based cryptocurrency company, in an attempt to raise $1 million exclusively through cryptocurrency donations. The Cancer Crypto Fund was launched in February 2021.
A critical role marketing can play is in identifying the best audiences to target for specific fundraising initiatives. According to the Lilly Family School of Philanthropy, understanding donor motivations and their relationships with salient causes can improve fundraising success. Therefore, during strategy development, NPOs should prioritize intended audiences, including the organization's leadership, grantees and beneficiaries, donors, policymakers, and practitioners (Lynch-Cerullo & Cooney, 2011). Identifying specific characteristics of an individual or situation that can affect involvement may lead to strategies that can influence an increase or decrease in level of involvement (Day et al., 1995) and ultimately affect donation intention. This is because strategically targeting audiences based on involvement may lead to better fundraising results (Grau & Folse, 2007; Van Steenburg & Spears, 2021). Nonprofit marketing managers need to understand audience involvement by determining what is personally relevant to them in terms of a brand, behavior, event, situation, social environment, or a combination of those in order to develop the best strategies and tactical executions (Peter & Olson, 1994).
Recent research has found that those who are involved in an advertisement and have a positive attitude toward charitable giving are going to donate if they are told that others support the cause (Van Steenburg & Spears, 2021). Messages targeting those not involved with the ad but still believe giving is appropriate behavior, may turn them into donors if coupled with messages about community support for the NPO. Nonprofit managers can increase involvement through repeated campaign messages, the use of positive, rather than negative, message framing, and leveraging central cues (e.g., narratives based on statistics) that motivate audiences to process the information being communicated rather than peripheral cues (e.g., celebrity spokespeople) (Van Steenburg & Spears, 2021). While creating surprise through unusual and unexpected messages gets attention and increases involvement (Cockrill & Parsonage, 2016), nonprofit managers cannot make audiences too uncomfortable because it may lead to a negative emotional response (Garg & Lerner, 2013).
Advertising messages that make minimal donations acceptable (e.g., “even a penny helps”) increase donations (Cialdini & Schroeder, 1976), but only for those not involved in the ad (Van Steenburg & Spears, 2021). Therefore, minimal giving messages might have a positive effect on donations when leveraged through public service announcements, which are often scheduled by broadcasters at times of low viewership. Nonprofit managers must again guard against potential negative effects as research has found such messages suppress giving among those paying attention to the stimulus (Van Steenburg & Spears, 2021), making this a viable strategy for donor prospects, but not regular donors.
NPOs that leverage segmentation strategies have experienced greater success in predicting donor behavior (Durango-Cohen et al., 2013). Since individual differences affect donor behavior (Kumar & Chakrabarti, 2021), NPOs must invest in the segmentation of existing donors and donor prospects. For example, research has highlighted how gender identity (Gorczyca & Hartman, 2017), age cohort (Koczanski & Rosen, 2019), and socioeconomic status (Bennett, 2018) affect donation behavior. Because Millennials believe brand loyalty is continuously earned, NPOs can also find success by leveraging and segmenting marketing campaign around values important to this generation of donors using messages that communicate such ideas as transparency, candidness, desire for meaning, and autonomy (Lewis, 2019).
Marketing expertise allows nonprofits to conduct environmental scanning and segment their prospective donors to cultivate more long-term donor relationships. This strategically positions marketing as the solution to better engage the various populations that NPOs serve. If NPOs can better understand the donor segments being targeted, engagement opportunities can be tailored to implement relationship marketing efforts, which are key to sustaining the relationships with donors over a long period of time and building brand loyalty (Sargeant, 2001).
5.2 Leveraging data analysis and measuring impact
Nonprofits have historically struggled with identifying appropriate metrics that can be useful in measuring their true successes. A survey of NPO managers found organizations that infuse their mission into their metrics perform better than those that only use conventional metrics (McDonald & Masselli, 2019). Recently, adjusted performance measures have become more prevalent in the NPO sector when measuring the sustainability of organizational performance. Brooks (2004) weighed the advantages and disadvantages of two alternative approaches to evaluating fundraising practices and donation levels. Simple ratios measuring fundraising spending to total expenses, and donations to fundraising expenditures, were pitted against a modified form of these ratios, called Adjusted Performance Measures (APMs), giving NPOs a tool to show how much of their income is attributable to the environment as opposed to their fundraising efforts.
NPOs must also measure their donor acquisition and retention rates, and increases in donor share of giving. Retention rate, in particular, is necessary to measure in order to determine the ratio of donors with continued patronage. Measuring the conversion rate of volunteers to financial donors is also vital since member volunteers who are satisfied with their membership are more likely to become financial contributors (Hung, 2020). Measuring percentage changes in volunteer time and revenue from donations are also valuable metrics to decipher the effectiveness of fundraising efforts. Most importantly, to retain donors, NPOs need to improve both the quality of their communications and the communication choices they offer (Sargeant, 2001).
While websites are not effective dialogical communications tools to create relationships with potential donors (Ingenhoff & Martina Koelling, 2009), aligning website content with the mission and the organization's work is viewed as more positive by donors, and results in better engagement when used to arouse strong emotions (Bennett, 2017). In contrast, from a content perspective, the utility of search engine optimization and high page rankings is mixed. Creating engaging content for existing and prospective donors is more important than incorporation of keywords and clickable content (Bennett, 2017). Still, websites remain helpful measuring tools to ascertain the number of people viewing the content of their pages and how long visitors spend on pages. They are also important data sources to gauge if donors clicked on a call-to-action link from NPO communications efforts. Social media metrics are another measurement tool to capture fundraising data. For example, there is a positive correlation between the number of “likes” on an NPO's Facebook page, contributions and earned income (Lee, 2021).
Measuring return on investment on matching grant offers and fundraising campaigns is another performance metric NPOs must utilize to determine the efficacy of such efforts. Matching grants increase the likelihood that a given project receives donations, raises the total contributions received, including the match value, and increases the overall amount received (Krasteva & Yildirim, 2013). Announcing the mere presence of a significant lead donor substantially increases donations given, although it does not raise response rates (Huck & Rasul, 2011). Celebrity affiliation is also associated with increased public support (Harris & Ruth, 2015).
Marketing research has a significant role to play in NPOs becoming data-driven strategic decision-makers (Jones, 2014). A greater emphasis on performance measurement has been shown to increase an NPO's revenue and impact. Historically, before the ease of data availability, NPOs relied on simply sharing compelling stories to emotionally draw on potential donors to raise funds (Witjas-Paalberends et al., 2018). Today, strategic NPOs are leveraging data to provide evidence to grant makers, who increasingly want substantial evidence of how their investments have and will continue to create an impact. In fact, major foundations often insist on measurable outcomes as a precondition to funding projects. For example, the Bill and Melinda Gates Foundation states that “actionable measurement” guides their giving strategies.
While some NPOs engage in the collection, analysis, and synthesis of data that ultimately aids in informed action and sound strategic decision making (Guo & Saxton, 2014), the strategic process should also allow for organizations to reflect and develop further insights as well as a willingness and ability to adapt themselves plus the populations they serve. NPOs should do so by systematically capturing data on the inputs, activities, and outputs of their work and of their investments. For example, to measure the effectiveness of any brand-related marketing, NPOs should leverage the brand equity index as developed by Boenigk and Becker (2016) that evaluates the value of a nonprofit brand based on its awareness, trust, and commitment. This index allows brand managers to evaluate brand performance over time and develop appropriate brand strategies. Data-driven decision making should happen from the strategy development stage through all critical stages of the fundraising process. Methodological issues regarding evaluation design and data collection should be driven more by purpose and assessed according to the feasibility of different approaches. Finally, organizations should take time to interpret and reflect upon the results before taking actionable plans.
5.3 Communicating value through engagement and education
NPOs must communicate their value and impact to consumers, a vital characteristic of the marketing discipline (Barr, 2020; Kumar & Chakrabarti, 2021). Numerous studies have examined the impact of nonprofit reputations on donor behavior, with results indicating a positive association between brand reputation and giving behavior (Bekkers & Wiepking, 2011). Other factors that were found to be important in the charitable contribution decision were the organization's scope of services and name recognition.
The pandemic served as a reminder for NPOs that a crucial role of is disseminating information and promoting advocacy. As mentioned previously, the AHA served as a trusted source for health-related information through the beginning of the pandemic (Elkind et al., 2020). While this case is pandemic specific, it highlights how marketing can shape consumer knowledge about different causes. In fact, the value NPOs offer is linked not only to their fundraising and service capabilities but also how well they educate the population about their given cause (Shah & George, 2021).
Communications may be the “missing link” in CSR initiatives (Dawkins, 2004, p. 108), with symmetrical, two-way communications crucial to building credibility and trust with an NPO's affiliations (Dozier et al., 2013). Yet, self-publicity can sometimes have drawbacks (Harrison, 2019). Seeking publicity for one's actions might prompt some to question the NPOs motives. In some sectors, there might be a stigma attached to any form of promotion, including advertising. Alternatively, with aggressive promotion, these organizations could be faced with attracting more requests than they can handle. Traditionally, fundraising was practiced quietly, without much fanfare (Ihm, 2015), yet the current media environment and culture mandate that NPOs strategically communicate the success stories to other stakeholders and to society at large.
To this effect, measuring all communications touchpoints with donors is a key tool to discern fundraising success. NPOs leverage various communications strategies to provide information on the state of a project since such information-sharing positively affects donations made by subsequent donors (Kamatham et al., 2021). From websites to social media to email and traditional surface mail, NPOs are reimagining their communications strategies and the platforms they use to contact givers and moving many of these touchpoints online (Lewis, 2019). Consequently, measuring the effectiveness and reach of these efforts, particularly during the period of disasters, will help NPO strategists track how best to reach donors and beneficiaries of their services.
Engagement also requires NPOs to maintain meaningful interactions with donors. The next generation of donors wants to see the impact of their giving, be it through on-site experiences, events, or leadership positions within nonprofit governance (Lewis, 2019). This amplified engagement can also aid NPOs in educating consumers about their impact. For example, NPOs should facilitate informed giving because the average informed donation exceeds the uninformed donation. Therefore, the more informed the population, the better because informed people are more generous than uninformed individuals (Krasteva & Yildirim, 2013). Monitoring the number of informed people via phone calls, emails, or face-to-face and/or virtual discussions can act as a metric for fundraising participation rate. Tailoring donation requests to match the donor lifecycle also improves campaign success rate (Verhaert & Van den Poel, 2011b).
5.4 Adopt brand strategies and brand management practices
NPOs have much to gain from leveraging branding theories and models used regularly in the for-profit industry (Ewing & Napoli, 2005) as research has found a link between adopting brand strategies and developing a competitive advantage (Apaydin, 2011; Venable et al., 2005). Therefore, NPOs must consider their brand a strategic asset that can be leveraged for both internal (staff and volunteers) and external (donors) purposes. Consumers are willing to engage with brands in a relational sense because brands have become partners high in love, trust, and exclusivity (Fournier, 1998; Fuchs et al., 2013). As a result, marketers have been able to develop a relationship between the consumer and the brand over time that leads to aspects such as brand commitment and self-brand connection.
A primary focus should be placed on marketing communications, as it is communications with key audiences that are the mechanism through which relationship inferences form (Fournier & Lee, 2009) allowing marketers to create meaning for their brands in developing the relationship. In building a donor-brand relationship, NPOs must ensure donors remain satisfied because satisfaction is the consumer's perception of brand quality based on transactions over time, and leads to a belief that the brand will act with integrity. Once trust is established, a personal connection is formed (Hess & Story, 2005) that can lead to development of affective response to the brand through brand attachment and brand experience.
In the context of marketing, brand attachment is a bond of strong feeling, connection, affection and love between an individual and a specific object (Thomson et al., 2005), creating a cognitive and affective bond between brand and consumer (Park et al., 2006). Therefore, the more attached a donor is with the brand, the more they will exhibit donation behaviors (Park et al., 2010) as a strong nonprofit brand provides donors with reliability while also reducing donation risk (Voeth & Herbst, 2008). Brand attachment can also be enhanced through a positive brand experience (Dolbec & Chebat, 2013), which is developed when individuals are exposed to brand-related marketing communications elements (e.g., brand colors, designs, shapes, and spokescharacters). By managing both functional and emotional elements of a brand, NPOs can deliver distinctive and unique interactions with the goal of creating brand experiences to enhance brand equity and brand loyalty (Payne et al., 2009; Simmons, 2009).
Brand management for an NPO means coordinating communications for different audiences—donors, volunteers, and beneficiaries—that have different motivations for engaging with the NPO. This means NPOs must develop a flexible brand (Stride & Lee, 2007) that still aligns with the organization's mission, vision, and values. Other challenges to nonprofit brand management include a lack of financial resources dedicated to marketing, an unclear understanding of how to connect an NPO's image with its identity, and the need to focus on issues that have short-term implications (Evans et al., 2012; Lee, 2013). Therefore, NPOs must dedicate enough operations capital to support their brand, while also understanding that building donor-brand relationships takes time. Finally, some audiences may consider marketing and branding efforts to be an unnecessary commercialization of the NPO (Maier et al., 2016), or lead them to question how their donation funds are being used (West & Sargeant, 2004). Nonprofit managers must educate these stakeholders that adoption of best practices in brand strategies and brand management will lead to greater brand equity and brand loyalty, thus positively impacting overall donations and improving the ability of the NPO to achieve its mission.
6 RESEARCH CONSIDERATIONS AND CONCLUSIONS
Even though this is the first effort to examine the threefold combination of changing economic behavior, public policies, and a global pandemic, the effectiveness of the proposed conceptual framework depends on academia being willing to engage in research specifically related to the future of NPO fundraising. The dearth of research on the effects of public policy on charitable giving and fundraising success seems to be a noticeable gap in the literature and should be of great concern to marketers interested in TCR. Research should aim not only to address the gap but follow the tenants of TCR by affecting policy going forward so that NPOs are not caught in a game of wondering how the next governmental administration or legislature will impact their financial operations.
Importantly, the model presented here should be tested to validate the concepts it presents. A vital topic academic researchers must investigate is when, where, and how younger generations want to engage with the nonprofit industry. Preliminary efforts (Ross & Kapitan, 2019) have created more questions for academics to answer. It is only with these answers that NPOs will be able to implement marketing strategies to positively impact fundraising. Ultimately, academic research must offer evidence to NPOs regarding what fundraising strategies will be successful with what audiences going forward.
There will also be a need for research into the role of NPOs in a world affected by a global pandemic. In particular, studies are needed to measure and communicate needs, value, impact, innovation, and productivity (Barr, 2020). There is an urgent need for researchers and policymakers to explore certain aspects of giving behavior during and as the pandemic subsides, with the understanding that the pandemic is still ongoing and a post-pandemic world is not foreseeable. For example, research (Frost, 2021) has found that during the pandemic, homelessness rose significantly for Americans in general and especially for people of color. In addition, the effects of the pandemic on public policy and advocacy should be put under the microscope. Only time will tell if policies such as the American Rescue Plan Act of 2021, a $1.9 trillion stimulus bill passed by the U.S. Congress, is having an effect during the pandemic and what may happen after a political transfer of power from one party to another. And though the pandemic's impact is decreasing, there are other related global risks that might put humanitarian sector, and as a result NPOs, under stress. Therefore, future research should examine the factors that lead to increases or decreases in repeated donations. For example, an analysis about donation intention in the post-pandemic world could be developed and compared to pre-pandemic figures to better predict future donor behavior. This undertaking must be approached for individual and corporate donors in relation to domestic and international NPOs, given the global impact of COVID-19.
The conceptual framework presented here aims to help NPOs visualize the future of fundraising and provide direction for successful fundraising practices in the future. While previous research provides some related summaries (e.g., Kumar & Chakrabarti, 2021), this paper incorporates individual and corporate donation behavior into a framework that integrates previous findings and also addresses the effects of the COVID-19 pandemic on the interplay between financial behavior and public policy. This is in line with the Envisioning-Identifying component that MacInnis (2011, 138) describes as providing a novel framework or new perspective to “make us aware of what we have been missing and why it is important” and to “reveal what new questions can be addressed from identifying the entity.” In doing so, we provide direction for NPOs by considering how behavior, policy, and the effects of the pandemic will need to be addressed in future fundraising efforts through strategic adjustments based on changing consumer and corporate financial behavior, leveraging data to drive strategies as well as measure the impact of fundraising efforts, communicating their value while engaging and educating stakeholders, and adopting branding and brand management strategies. The conceptual framework demonstrates the need to adopt these tools, particularly in a post-pandemic world.
In conclusion, the sustainability of NPOs will depend on their ability to fundraise effectively and efficiently, despite the changes in giving behavior and public policy, as well as operating during a global health pandemic and adjusting moving forward. This paper provides a guide for NPOs to fundraise and measure their efforts in the new normal while highlighting marketing's role in executing successful fundraising attempts. Future research considerations are presented, and we believe that this area of research will continue to aid the growth of NPOs.
