Charitable Giving and "Excessive" Fundraising

Abstract

Recently, some charities have been attacked for spending an “excessive” portion of their resources on fundraising. This paper shows how competition for donations can push fundraising shares to high levels even when donors dislike charities that spend a large portion of receipts on fundraising. It also considers a case in which donors take account of the productivity of fundraising in generating gifts from others. In the light of the models developed in the paper, a variety of regulatory strategies are assessed from the dissemination of information to the establishment of a federated fund drive.

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