Preliminary empirical analysis of the relationship dynamics between marketing activities and fundraising success in nonprofit organizations

In nonprofit sector, marketing activities and their impact on fundraising success are often not observed in a complex and dynamic context, due to the complexity of the sector itself. Fundraising success contributes significantly to the overall organizational success of a nonprofit organization. However, the fundraising itself should be based on a proper implementation of marketing activities, which justifies the efforts to create a model that will clarify relationship between the two. In this paper, such a model is developed, based on the system dynamics methodology. The preliminary empirical testing has been also conducted. The proposed model also addresses the potential impact of the feedback control and the organizational learning. The study was conducted by using the qualitative methodology (the focus group approach) on a sample of Croatian humanitarian organizations representatives. Empirical qualitative analysis has also provided an insight into additional variables, which have been included into the model. It consists of six smaller interconnected feedback loops, which form a larger causal loop diagram, representing the marketing activities and fundraising success relationship. The primary purpose of this study is to present the initial results of the application of a system dynamics methodology to modeling the marketing activities in the nonprofit sector. It is expected that, in the further research, the initial results can be further quantified, as basis for the application of a Structural Equation Modeling (SEM) approach.