Do Donors Care About Results? An Analysis of Nonprofit Arts and Cultural Organizations

Abstract

Nonprofits are facing increasing pressure to measure and demonstrate their performance outcomes. However, we know little about the relationship between a nonprofit’s performance and its ability to attract donations. Do donors value an organization’s performance information when making giving decisions? We find that organizations that are more successful (i.e., attract larger audiences to their programs and more visitors to their websites) tend to receive fewer contributions. Despite a growing culture of performance measurement, the empirical evidence does not provide strong support of its relevance among donors. A plausible theoretical reasoning is that better performance outcomes create the image of success, making organizations look less needy. These results call for more research on the link between performance outcomes and philanthropy.