Contributions-reliant SPOs

Many SPOs produce group goods whose benefits are shared collectively by particular beneficiary groups, for example alumni of a university or sufferers of a disease on which research is being carried out, or art lovers of one genre or another. Such organizations may not be able to charge for all of the benefits they provide nor attract society-wide support through government, but may be able to support themselves substantially through philanthropy. This chapter explains the rationale for philanthropy as a key source of SPOs’ income as it relates to their missions and circumstances, and also offers examples of organizations that are primarily philanthropy dependent. Contributions income tends to be concentrated in certain fields of social endeavor. For example, while contributions account only for approximately 13 percent of the revenues of reporting public charities in the U.S. overall (McKeever and Pettijohn, 2014), they account for 69 percent of the revenues of international and public affairs public charities, 45 percent of the revenues in arts, culture and humanities, 49 percent in environmental and animal charities, 20 percent in human services, 17 percent in education, and only 4 percent in health care (Roeger et al., 2012). Benefits theory suggests that these proportions roughly reflect the ratios of public or group and private benefits associated with the services provided by SPOs in these various broad fields of activity. However, the phenomenon of private giving is much more nuanced than that. First, there are many different sources and varieties of gifts and contributions income; second, the motivations of donors and the mechanisms available to solicit their support are also manifold. This background is prerequisite to understanding the strategic place of gift income in the income portfolio of any particular SPO.