IDEAS home Printed from https://ideas.repec.org/a/eee/jbrese/v186y2025ics0148296324005010.html
   My bibliography  Save this article

Retain, reactivate or acquire: Can nonprofits reliably use community profiles as an alternative to past donation data?

Author

Listed:
  • Sinha, Shameek
  • Malik, Sumit
  • Mahajan, Vijay
  • ter Hofstede, Frenkel

Abstract

Nonprofits face the challenge of low response rates to solicitations, leading to unachieved fundraising goals. They face difficulty in retaining active donors, reactivating lapsed donors, and acquiring prospective donors. The challenge often stems from the need for more reliable data for predicting the expected behavior of different groups of donors. Although nonprofits have reliable data relating to past donations from active donors, the data on lapsed donors is limited, and data on prospective donors is nonexistent. We propose that nonprofits can use community-clustered donor profiles to predict the expected donations. Our results validate that predictions based on “actual donation data” and “community donor profiles” are equivalent in accuracy. Drawing insights from the nonprofit marketing and social psychology literature, we suggest that nonprofits can reliably devise targeting strategies for active, lapsed, and prospective donors using community-clustered profiles. We test these predictions using a donation incidence model and conduct several robustness checks.

Suggested Citation

  • Sinha, Shameek & Malik, Sumit & Mahajan, Vijay & ter Hofstede, Frenkel, 2025. "Retain, reactivate or acquire: Can nonprofits reliably use community profiles as an alternative to past donation data?," Journal of Business Research, Elsevier, vol. 186(C).
  • Handle: RePEc:eee:jbrese:v:186:y:2025:i:c:s0148296324005010
    DOI: 10.1016/j.jbusres.2024.114997
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S0148296324005010
    Download Restriction: Full text for ScienceDirect subscribers only

    File URL: https://libkey.io/10.1016/j.jbusres.2024.114997?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Minyoung Kim & Sunghoon Kim & Jongkuk Lee, 2018. "Spatial heterogeneity of country-of-origin effects within a country: analysis of online review ratings in the US car market," Marketing Letters, Springer, vol. 29(2), pages 189-205, June.
    2. Jean Tirole & Roland Bénabou, 2006. "Incentives and Prosocial Behavior," American Economic Review, American Economic Association, vol. 96(5), pages 1652-1678, December.
    3. de Vries, Robert & Gosling, Samuel & Potter, Jeff, 2011. "Income inequality and personality: Are less equal U.S. states less agreeable?," Social Science & Medicine, Elsevier, vol. 72(12), pages 1978-1985, June.
    4. Michael Braun & David A. Schweidel, 2011. "Modeling Customer Lifetimes with Multiple Causes of Churn," Marketing Science, INFORMS, vol. 30(5), pages 881-902, September.
    5. Marco Caliendo & Sabine Kopeinig, 2008. "Some Practical Guidance For The Implementation Of Propensity Score Matching," Journal of Economic Surveys, Wiley Blackwell, vol. 22(1), pages 31-72, February.
    6. Minguez, Ana & Javier Sese, F., 2022. "Why do you want a relationship, anyway? Consent to receive marketing communications and donors’ willingness to engage with nonprofits," Journal of Business Research, Elsevier, vol. 148(C), pages 356-367.
    7. Robert Mcclelland & Arthur C. Brooks, 2004. "What is the Real Relationship between Income and Charitable Giving?," Public Finance Review, , vol. 32(5), pages 483-497, September.
    8. Imbens, Guido W. & Lemieux, Thomas, 2008. "Regression discontinuity designs: A guide to practice," Journal of Econometrics, Elsevier, vol. 142(2), pages 615-635, February.
    9. Peter S. Fader & Bruce G. S. Hardie & Jen Shang, 2010. "Customer-Base Analysis in a Discrete-Time Noncontractual Setting," Marketing Science, INFORMS, vol. 29(6), pages 1086-1108, 11-12.
    10. Verhaert, Griet Alice & Van den Poel, Dirk, 2011. "Improving Campaign Success Rate by Tailoring Donation Requests along the Donor Lifecycle," Journal of Interactive Marketing, Elsevier, vol. 25(1), pages 51-63.
    11. David A. Schweidel & George Knox, 2013. "Incorporating Direct Marketing Activity into Latent Attrition Models," Marketing Science, INFORMS, vol. 32(3), pages 471-487, May.
    12. Füsun F. Gönül & Frenkel Ter Hofstede, 2006. "How to Compute Optimal Catalog Mailing Decisions," Marketing Science, INFORMS, vol. 25(1), pages 65-74, 01-02.
    13. Hahn, Jinyong & Todd, Petra & Van der Klaauw, Wilbert, 2001. "Identification and Estimation of Treatment Effects with a Regression-Discontinuity Design," Econometrica, Econometric Society, vol. 69(1), pages 201-209, January.
    14. Bennett, Roger & Sargeant, Adrian, 2005. "The nonprofit marketing landscape: guest editors' introduction to a special section," Journal of Business Research, Elsevier, vol. 58(6), pages 797-805, June.
    15. Thomas, Suman Ann & Feng, Shanfei & Krishnan, Trichy V., 2015. "To retain? To upgrade? The effects of direct mail on regular donation behavior," International Journal of Research in Marketing, Elsevier, vol. 32(1), pages 48-63.
    16. Andrew Ainslie & Peter E. Rossi, 1998. "Similarities in Choice Behavior Across Product Categories," Marketing Science, INFORMS, vol. 17(2), pages 91-106.
    17. Mayer, Duncan J. & Fischer, Robert L., 2023. "Exploring data use in nonprofit organizations," Evaluation and Program Planning, Elsevier, vol. 97(C).
    18. David S. Lee & Thomas Lemieux, 2010. "Regression Discontinuity Designs in Economics," Journal of Economic Literature, American Economic Association, vol. 48(2), pages 281-355, June.
    19. Kiefer, Nicholas M, 1988. "Economic Duration Data and Hazard Functions," Journal of Economic Literature, American Economic Association, vol. 26(2), pages 646-679, June.
    20. Echambadi, Raj & Jindal, Rupinder P. & Blair, Edward A., 2013. "Evaluating and Managing Brand Repurchase Across Multiple Geographic Retail Markets," Journal of Retailing, Elsevier, vol. 89(4), pages 409-422.
    21. Rajeev H. Dehejia & Sadek Wahba, 2002. "Propensity Score-Matching Methods For Nonexperimental Causal Studies," The Review of Economics and Statistics, MIT Press, vol. 84(1), pages 151-161, February.
    22. René Bekkers & Ingrid Veldhuizen, 2008. "Geographical Differences In Blood Donation And Philanthropy In The Netherlands – What Role For Social Capital?," Tijdschrift voor Economische en Sociale Geografie, Royal Dutch Geographical Society KNAG, vol. 99(4), pages 483-496, September.
    23. Puneet Manchanda & Asim Ansari & Sunil Gupta, 1999. "The “Shopping Basket”: A Model for Multicategory Purchase Incidence Decisions," Marketing Science, INFORMS, vol. 18(2), pages 95-114.
    24. Cermak, Dianne S. P. & File, Karen Maru & Prince, Russ Alan, 1994. "A benefit segmentation of the major donor market," Journal of Business Research, Elsevier, vol. 29(2), pages 121-130, February.
    25. Thomas J. Steenburgh & Andrew Ainslie & Peder Hans Engebretson, 2003. "Massively Categorical Variables: Revealing the Information in Zip Codes," Marketing Science, INFORMS, vol. 22(1), pages 40-57, August.
    26. Peter E. Rossi & Robert E. McCulloch & Greg M. Allenby, 1996. "The Value of Purchase History Data in Target Marketing," Marketing Science, INFORMS, vol. 15(4), pages 321-340.
    27. Emerson Wagner Mainardes & Rozélia Laurett & Nívea Coelho Pereira Degasperi & Sarah Venturim Lasso, 2016. "What motivates an individual to make donations of money and / or goods?," International Review on Public and Nonprofit Marketing, Springer;International Association of Public and Non-Profit Marketing, vol. 13(1), pages 81-99, April.
    28. Champniss, Guy & Wilson, Hugh N. & Macdonald, Emma K. & Dimitriu, Radu, 2016. "No I won't, but yes we will: Driving sustainability-related donations through social identity effects," Technological Forecasting and Social Change, Elsevier, vol. 111(C), pages 317-326.
    29. Benjamin J & Neale Mahoney & Hanbin Yang & Tarun Ramadorai, 2023. "What Determines Consumer Financial Distress? Place- and Person-Based Factors," The Review of Financial Studies, Society for Financial Studies, vol. 36(1), pages 42-69.
    30. Feld, Sebastian & Frenzen, Heiko & Krafft, Manfred & Peters, Kay & Verhoef, Peter C., 2013. "The effects of mailing design characteristics on direct mail campaign performance," International Journal of Research in Marketing, Elsevier, vol. 30(2), pages 143-159.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Miguel Ángel Borrella-Mas & Martin Rode, 2021. "Love is blind: partisan alignment and political corruption in Spain," SERIEs: Journal of the Spanish Economic Association, Springer;Spanish Economic Association, vol. 12(3), pages 423-451, September.
    2. Ari Hyytinen & Jaakko Meriläinen & Tuukka Saarimaa & Otto Toivanen & Janne Tukiainen, 2018. "When does regression discontinuity design work? Evidence from random election outcomes," Quantitative Economics, Econometric Society, vol. 9(2), pages 1019-1051, July.
    3. Chad D. Meyerhoefer & Muzhe Yang, 2011. "The Relationship between Food Assistance and Health: A Review of the Literature and Empirical Strategies for Identifying Program Effects," Applied Economic Perspectives and Policy, Agricultural and Applied Economics Association, vol. 33(3), pages 304-344.
    4. Park, Chang Hee & Park, Young-Hoon & Schweidel, David A., 2018. "The effects of mobile promotions on customer purchase dynamics," International Journal of Research in Marketing, Elsevier, vol. 35(3), pages 453-470.
    5. Glady, Nicolas & Lemmens, Aurélie & Croux, Christophe, 2015. "Unveiling the relationship between the transaction timing, spending and dropout behavior of customers," International Journal of Research in Marketing, Elsevier, vol. 32(1), pages 78-93.
    6. Wesley Hartmann & Harikesh S. Nair & Sridhar Narayanan, 2011. "Identifying Causal Marketing Mix Effects Using a Regression Discontinuity Design," Marketing Science, INFORMS, vol. 30(6), pages 1079-1097, November.
    7. Chakravarty, Shubha & Lundberg, Mattias & Nikolov, Plamen & Zenker, Juliane, 2019. "Vocational training programs and youth labor market outcomes: Evidence from Nepal," Journal of Development Economics, Elsevier, vol. 136(C), pages 71-110.
    8. Baum-Snow, Nathaniel & Ferreira, Fernando, 2015. "Causal Inference in Urban and Regional Economics," Handbook of Regional and Urban Economics, in: Gilles Duranton & J. V. Henderson & William C. Strange (ed.), Handbook of Regional and Urban Economics, edition 1, volume 5, chapter 0, pages 3-68, Elsevier.
    9. repec:tiu:tiutis:52e91e47-4a2d-4e7b-bb23-3926b842ae30 is not listed on IDEAS
    10. Aurélie Lemmens & Sunil Gupta, 2020. "Managing Churn to Maximize Profits," Marketing Science, INFORMS, vol. 39(5), pages 956-973, September.
    11. Francesca Carta & Lucia Rizzica, 2015. "Female employment and pre-kindergarten: on the uninteded effects of an Italian reform," Temi di discussione (Economic working papers) 1030, Bank of Italy, Economic Research and International Relations Area.
    12. Dong, Yingying, 2010. "Jumpy or Kinky? Regression Discontinuity without the Discontinuity," MPRA Paper 25461, University Library of Munich, Germany.
    13. Yoichi Arai & Hidehiko Ichimura, 2018. "Simultaneous selection of optimal bandwidths for the sharp regression discontinuity estimator," Quantitative Economics, Econometric Society, vol. 9(1), pages 441-482, March.
    14. Anil Kumar, 2018. "Do Restrictions on Home Equity Extraction Contribute to Lower Mortgage Defaults? Evidence from a Policy Discontinuity at the Texas Border," American Economic Journal: Economic Policy, American Economic Association, vol. 10(1), pages 268-297, February.
    15. Ivan A Canay & Vishal Kamat, 2018. "Approximate Permutation Tests and Induced Order Statistics in the Regression Discontinuity Design," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 85(3), pages 1577-1608.
    16. Arteaga, Irma & Heflin, Colleen & Gable, Sara, 2016. "The impact of aging out of WIC on food security in households with children," Children and Youth Services Review, Elsevier, vol. 69(C), pages 82-96.
    17. Ceren Ertan Yörük & Barış Yörük, 2015. "Alcohol consumption and risky sexual behavior among young adults: evidence from minimum legal drinking age laws," Journal of Population Economics, Springer;European Society for Population Economics, vol. 28(1), pages 133-157, January.
    18. Christopher S. Carpenter & Carlos Dobkin & Casey Warman, 2016. "The Mechanisms of Alcohol Control," Journal of Human Resources, University of Wisconsin Press, vol. 51(2), pages 328-356.
    19. Vergolini, Loris & Zanini, Nadir, 2015. "Away, but not too far from home. The effects of financial aid on university enrolment decisions," Economics of Education Review, Elsevier, vol. 49(C), pages 91-109.
    20. Sebastian Calonico & Matias D Cattaneo & Max H Farrell, 2020. "Optimal bandwidth choice for robust bias-corrected inference in regression discontinuity designs," The Econometrics Journal, Royal Economic Society, vol. 23(2), pages 192-210.
    21. Gaggero, A. & Gil, J. & Jiménez-Rubio, D. & Zucchelli, E., 2021. "Health information and lifestyle behaviours: the impact of a diabetes diagnosis," Health, Econometrics and Data Group (HEDG) Working Papers 21/02, HEDG, c/o Department of Economics, University of York.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:jbrese:v:186:y:2025:i:c:s0148296324005010. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Catherine Liu (email available below). General contact details of provider: http://www.elsevier.com/locate/jbusres .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.