“Pennies for Charity”: Why Charities Outsource Fundraising
نویسندگان
چکیده
Charities frequently rely on high-priced professional solicitors but donors seem unaware. To understand this, we propose an agency-based theory of fundraising. We show that trading off its incentive cost, the charity optimally hires a sufficiently "efficient" solicitor and offers him a high percentage of the donations collected, implying a high price of giving. Thus, if, as required by law, donors made aware of paid solicitations, then the charity would not outsource its fundraising. Outsourced fundraising can be profitable if: donors are unaware; donors have intense "warm-glow" preferences; or the charity is concerned about its watchdog ratings.
منابع مشابه
A Theory of Outsourced Fundraising: Why Dollars Turn into “Pennies for Charity”
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