Many smaller charities will turn to fundraising alliances (FAs) to help raise money, trusting the familiarity of a well-known brand — such as the UK’s Disasters Emergency Committee or Canada’s Humanitarian Coalition — rather than going it alone.
But new research out of the Alberta School of Business suggests joining alliances may not necessarily be the best choice.
“We find evidence that FAs do not help (and may harm) charity fundraising, particularly for smaller charities that are perceived to be low on familiarity, trustworthiness and effectiveness,” say study authors Dr. Robert Fisher of the University of Alberta and Dr. Oliver Rutz of the University of Washington.
Funding alliances are attractive because they can operate more efficiently to reduce fundraising costs. But the authors found that a disproportionate amount of donations is diverted from smaller charities with weaker brands to well-known charities such as the Canadian Red Cross, Oxfam and Save the Children.
“FAs may receive fewer donations than the member charities would have received had they fundraised separately,” write Fisher and Rutz in The Journal of Non-profit and Public Sector Marketing, especially if “donors do not have the option of directing their donation to an individual member charity.”
They add that co-operation can be crucial in crises but may not always benefit charities financially. Smaller charities, they say, should consider short-term alliances only if they lack independent fundraising capacity.