Enhancing fundraising productivity through strategic revenue concentration decisions: Evidence from food banks

Nonprofit organizations (NPOs) rely heavily on fundraising activities to generate the resources necessary to fulfill their missions and sustain their programs and services. While fundraising is inherently labor-intensive, current research often overlooks the return on labor investment when evaluating performance. Furthermore, NPOs face a critical decision regarding the allocation of fundraising teams across diverse solicitation methods to generate revenue, yet existing literature presents conflicting evidence on the impact of revenue concentration and lacks context-specific recommendations. To address these gaps, we examine the comparative dynamics of revenue concentration versus diversification strategies, specifically focusing on when and how to implement them, with a goal of enhancing the organization's fundraising productivity, defined as fundraising revenue per full-time equivalent. Utilizing a three-year panel dataset from 105 food banks, we demonstrate that a revenue concentration strategy enhances fundraising productivity, and this effect can be amplified by prioritizing highly personalized solicitation methods. On the other hand, organizational age marginally and negatively moderates the positive impact of revenue concentration on productivity. Our post hoc analyses on different age segments indicate that an increased degree of revenue concentration can significantly enhance fundraising productivity for the youngest food banks, while having no statistically significant effect for the more mature ones. Through additional post-hoc analyses, we show that grant-writing and personal solicitation are the main drivers behind the positive moderating role of prioritizing highly personalized solicitation methods, and that increasing the proportion of full-time fundraisers could also amplify the positive impact of revenue concentration on productivity. We also observe a positive impact of revenue concentration on alternative performance metrics, such as fundraising effectiveness (measured as total fundraising revenue) and revenue growth (measured as the year-over-year rate of increase in total fundraising revenue). However, we find evidence on the negative impact of revenue concentration on financial stability (measured as the amount of deviation from predicted fundraising revenue). Consequently, NPOs must carefully tailor their revenue concentration strategies to align with their specific performance goals at different organizational ages while considering other operational factors, such as the nature of the adopted solicitation methods and labor mix.

• 저널Production and Operations Management
• 토픽Nonprofit Sector and Volunteering · Sociology and Political Science
• DOI10.1177/10591478261477172
• 저자Yingru “Ruby” Han, Luv Sharma, Pelin Pekgün