The Impact of Revenue Sources on Marketing Behavior: Examining Web‐Promotion and Place‐Marketing in Nonprofit Organizations

Abstract

To overcome failure to generate profits from the goods they produce, nonprofit organizations have unique methods to generate and sustain capital flows resulting in distinct exchange relationships. This leads scholars to argue that nonprofit marketing strategies should differ as well. Given the lack of empirical work that investigates this possibility, this article explores how the uniqueness of the nonprofit funding environment shapes the ways in which nonprofits use business principles to market their products and services, asking if the resource acquisition process is the primary mechanism that predicts business‐like marketing behavior. Findings indicate that both the resource acquisition process and institutional relationships are influential in predicting business‐like marketing behavior.

Keywords:

• nonprofit marketing
• market failure
• resource dependency

Notes

1. Location specific nonprofits were designated through the IRS codes established through National Tax Exempt Entities classification within each category and include A50, A60, B20–70, C41, D32, D34, D50, E20, E31, E32, E91, F30, F42, I30, K30, L20, L40, L50, N20, N30, N40, N50, O20,)O0, O40, O50, P27, P28, P29, P33, P43, P47, P70, P80, S20, W60, X20, Y40, Y50.

2. Place concepts counted include “location, site, environment, place, and setting,” excluding the word “site” when it pertained to the actual Web site.

3. To see this, let p_j denote the relative risk of outcome j (i.e., the ratio of the probability of outcome j to the probability of the base outcome). Then, since the multinomial logit model is set up to estimate ln(p_j )  =  Σ x_k β _jk , we have β _jk  =  (∂p_j /∂x_k )/p_j  =  ∂p_j /p_j for a unit change in x_k . Therefore, for small values of β _jk , we have exp(β _jk ) ≈ 1+∂p_j /p_j  =  (p_j +∂p_j )/p_j  =  p_j ′/p_j , where p_j ′ is the “new” value of p_j after the change in x_k . Thus, the relative risk ratio measures the ratio of the new relative risk of outcome j relative to the old relative risk, which is the factor by which the relative risk changes as the result of the change in x_k .