The Economic Irrationality and the Impact on the Elements of an Optimal Choice of Fundraising Techniques for Non-Profit Organizations: a Case Study of Canada

Abstract

According to the rational choice theory, the donor decision-making process is intended to be optimization-based, in which a person determines and selects where and how much money they will give away depending on some consistent and rational criteria. Nevertheless, much research has pointed out that during the donation process, monetary donors do not carry that rationality with them all the time. The motivations for giving are still often biased and affected by certain underlying determinants and elements of fundraising techniques. In other words, the choice of a donor is rarely only black and white, but usually, involves some shades of gray. If the personnel in charge of fundraising positions in non-profit organizations can understand and fully utilize that fact, they can have a more guaranteed success in their fundraising campaigns. Specifically, by using empirical data from Canada, this research aims to address those following questions: (1) Which internal and external determinants make a person more willing to give, and how do those factors also affect the amount of money contributed? If yes, to what extent? (2) How can non-profit organizations utilize the irrationality of donors to ameliorate their fundraising campaigns?