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The Science of Fundraising: Questioning Fundraising’s ‘Inefficiencies’

(March 17, 2008) Can academic studies help fundraisers better meet their bottom line? As researchers begin to examine the science of fundraising, it seems the answer could be yes, according to a recent article in The New York Times Magazine.

The magazine ran a series of stories on Sunday, March 9, focused on philanthropy, fundraising and the nonprofit sector. One article (“What Makes People Give?”) described the studies of economists John List and Dean Karlan, who wondered if fundraisers’ conventional wisdom was askew due to the lack of empirical underpinning for what they do.

So far, their findings on matching gifts and seed money have shown some promise in identifying potential inconsistencies in the conventional wisdom about fundraising. List and Karlan’s experiments are unique as they are conducted during actual fundraising campaigns to determine what types of messages donors respond to or not.

Riddled with inefficiencies?

However, is fundraising really “riddled with inefficiencies” as the article provocatively asks? Fundraisers say no, but there is value in this trend toward real-world research.

“Quantitative research is important, but this business is still an art,” said Henry Goldstein, CFRE, president of The Oram Group Inc., in New York and past chair of AFP, in response to the Times Magazine article.

Goldstein said that there is already much self-examination going on throughout the nonprofit world as to how to do a better job of fundraising. Charities are continuously taking a close look at their methods of solicitation to find out which methods work better. They may be doing this on a smaller scale, but they are definitely looking to be efficient, says Goldstein, who disagrees with the Times article’s implication that fundraisers are using empirically untested strategies of raising money.

Fundraisers who have participated in formal academic programs about philanthropy and fundraising express another challenge. For example, Kristyn Cooper, an AFP member who earned a Master of Arts in Philanthropic Studies degree from The Center on Philanthropy at Indiana University in Indianapolis in 2004, said the scholarly research she studied certainly provided her a strong foundation for understanding the nonprofit sector and philanthropy. However, she says much of the research is still geared to other academics and not to practitioners. When she entered the profession, Cooper said she was forced to rely on internships to understand the how—how to engage donors and effectively practice fundraising.

“For the first two years of my career, I struggled to piece together the practical and the theoretical concepts of fundraising,” explained Cooper, who now works as development associate at The de Paul School in Louisville, Ky. “Eventually I was able to bridge the gap between the two and I feel that I now have a deeper understanding of the nonprofit sector.”

“The importance of the Times Magazine article on giving is not the sensational implication that a fundraiser’s work is ‘riddled with inefficiencies,’ and that money is being thrown about haphazardly, because we know that is simply not true,” said Paulette Maehara, CFRE, CAE, president and CEO of AFP. “The real news is that scholars are starting to use their scientific tools and valuable analysis using real nonprofits as laboratories, so that we can make better use of research and become even better at doing our jobs. Institutions such as the Center on Philanthropy at Indiana University can ultimately provide fundraisers with a richer experience in their jobs as they begin to develop their skills.”

Access to research

So what is the status of academic research? And has progress been made on the practical side?

According to Russell N. James III, J.D., Ph.D., a basic level of research has already been done on fundraising and philanthropy, but there is far more to be studied. And much of what is out there has not been made accessible to practitioners in the field.

“If you ask an academic about some of these basic questions about fundraising, they will say, ‘We already know this, we’ve already published our results,’” said James, who is assistant professor at the Institute for Nonprofit Organizations at the University of Georgia and spent six years as director of planned giving at Central Christian College in Moberly, Miss. “But what hasn’t been done in these cases is to make the material accessible to fundraisers.”

James says that the acceptance of field research into the academic disciplines, which the Times article suggests is a promising new wave of academic research, is a good sign that there will be more research done on “real world,” practical areas of fundraising versus purely abstract questions.

“Academics have not historically been motivated to do research for practical purposes to help charities be more efficient,” James said. This may be changing, however. The Times article notes that the growth of the philanthropic sector has caught the attention of social scientists.

Bridging study and practice

AFP has been a positive force in encouraging practical research for fundraisers, according to James. He is currently a member of the AFP Research Council, which strives to support and encourage research on fundraising, provide a bridge for academics and practitioners to discuss research and to disseminate research information.

“We are certainly at a point where we need to move beyond intuition and anecdotal evidence on how best to raise funds and run nonprofits,” said Cathlene Williams, Ph.D., CAE, vice president of research at AFP. “Good work is being done in the academic community, but it needs to reach fundraisers in an accessible way. And we need to continue to communicate to scholars that there is a demand for this kind of research.”

Williams appreciates that the recent article in The New York Times Magazine highlighted the value of research in solidifying the field of fundraising and making it work better. “But we need to build on that momentum,” she continued. “Examining the particular results of List and Karlan’s study and the questions raised by the Times article is important, but the larger message is that this type of questioning and rigorous examination needs to happen more and more.”

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