The fundraising efficiency in U.S. non‐profit art organizations: an application of a Bayesian estimation approach using the stochastic frontier production model

The fundraising efficiency in U.S. non‐profit art organizations: an application of a Bayesian estimation approach using the stochastic frontier production model

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Article ID: iaor20112675
Volume: 35
Issue: 2
Start Page Number: 171
End Page Number: 180
Publication Date: Apr 2011
Journal: Journal of Productivity Analysis
Authors: ,
Keywords: art, efficiency, estimation, stochastic frontier, charities
Abstract:

This article examines how efficient art organizations are in raising funds from private giving. We measure fundraising efficiency using a Bayesian estimation approach using the stochastic frontier production model. We show that fundraising efficiencies are generally quite low for art organizations in the U.S. when private giving is only considered as a fundraising output; however, when the effect of fundraising on ticket sales is considered, fundraising efficiencies improve substantially. We also show that government grants have a negative impact on fundraising efficiency and therefore partially crowd out private giving.

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