Donors' giving decisions toward nonprofit commercialization: Do commercial form and intensity matter?

Abstract

Commercialization is an established yet contested practice in the nonprofit sphere. Whereas proponents point to increased financial stability, others warn about crowding out of individual donations. This ambiguity raises the question: Under which configuration is nonprofit commercialization (un)likely to uphold the promise of financial stability? Drawing on institutional theory, we conduct a survey experiment with U.S.-based individuals (N = 1031) to examine the impact of nonprofit commercialization form (i.e., commercialization of core/ancillary activities) and intensity on individual donation likelihood. Contrary to our theoretical expectations, we find that individual donors (a) prefer commercial ancillary activities over commercial core activities, and (b) are not negatively affected by high levels of commercial income. This study advances our understanding of how nonprofit commercialization affects donors' giving likelihood. This study also offers guidance to nonprofit practitioners on how to commercialize for better financial health.