How we beg: The analysis of direct mail appeals

Abstract

One of the reasons that nonprofit organizations have a comparative advantage over other organizational forms is that the nondistribution constraint renders them trustworthy in many transactions that require trust. However, the nondistribution constraint in and of itself may not be sufficient, and nonprofits must actively gain public trust. In particular, charities that are involved in fund-raising from the general public must make an effort to elicit and maintain donor confidence. The author proposes that they do so by a judicious use of signals and discusses the types of signals charities use to establish their trustworthiness to raise funds. Direct mail appeals, used by charities to raise funds from the general public, are examined to verify the signals discussed.