Determinants of charitable giving: an Australia example

Over the years, Nonprofit Organisations (NPOs) are experiencing a declining trend in their donation inflows from major sources of funds including the government. However, the demand for their goods and services has continually increased. Many are struggling to attract long-lasting donors to contribute to their organisation. As a result, NPOs deal with an increasingly competitive fundraising environment and must consider strategies to be operationally sustainable. This study examines the determinants of charitable giving in two stages.

Stage 1 employs a logistic regression model to identify the characteristics of a prospective donor. In Stage 2, an ordered logit model is specified to investigate the factors that will lead to sustained donation. From a survey of 400 individuals within the Australian population, the study finds that the employment status of the individual, interest in financial disclosures, perceptions of the reputation of the NPO, loyalty to the NPO and NPO disclosure regarding expenses are determinants of both donation decisions and sustained donation. Additionally, the study finds that a donor’s age, location of residence and level of financial knowledge influence his/her length of donation to NPO.