Browsing by Author "Qu, Heng"

Now showing 1 - 7 of 7
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    Beyond Grantmaking An Investigation of Program-Related Investments by U.S. Foundations
    (Sage, 2017) Qu, Heng; Osili, Una; Lilly Family School of Philanthropy
    This study investigates program-related investments (PRIs), which are mechanisms that foundations can use to achieve charitable purposes while generating moderate financial returns. There is a growing interest in PRIs and other similar market-based approaches among practitioners of philanthropy recently. We examine the internal and external factors that influence PRIs by U.S. foundations through both quantitative and qualitative analyses. By analyzing the Internal Revenue Service (IRS) and Foundation Center data, we find that foundations with more financial and human resources are more likely to adopt PRIs initially and also more intensively engage in PRIs. Foundations of 25 years or older invest less money in PRIs than younger foundations. Findings from the interviews with eight foundations reveal additional factors influencing foundations’ PRI activities, including staffing and expertise, the board and executive leadership, changes in the legal and economic environment, sectoral trends and peer networks, and the interests and needs of PRI recipients.
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    Charitable Giving in Nonprofit Service Associations: Identities, Incentives, and Gender Differences
    (Sage, 2017) Qu, Heng; Steinberg, Richard; Economics, School of Liberal Arts
    Nonprofit service associations, such as the Lions Clubs, Rotaries, and Kiwanis, provide collective goods. Membership in a service association involves two essential elements: members’ shared interest in the club’s charitable service and private benefits stemming from social interactions with other members, such as networking, fellowship, and fun. We report results from a laboratory experiment designed to test the effect of membership and priming on charitable giving. The two experimental conditions activate chains of associative memory linked to the service or socializing aspects of membership. We find that female subjects give significantly smaller donations after receiving the socializing stimulus. Male subjects are less sensitive to our experimental conditions, giving slightly more in the socializing condition, but the differences are not statistically significant. We discuss three mechanisms that may explain our results: social identity theory, reputation and image motivations, and quality inference.
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    Community Diversity and Donor Control: An empirical analysis of contributions to donor-advised funds at community foundations
    (2021-06) Qu, Heng; Paarlberg, Laurie E.
    This study examines the relationship between community ethnic-racial diversity and contributions to donors-advised funds (DAFs) held by community foundations. Unlike general contributions, DAFs allows donors to retain advisory control over their fund distribution based on individual preferences. In contrast to prior research that generally finds that diversity dampens private provision of public goods, we show that greater ethnic-racial diversity is significantly associated with higher levels of contributions to DAFs at community foundations but not with general contributions. The findings contribute to the literature on diversity and public goods provision and have practical implications for the policy role of private philanthropy.
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    Is “overhead” a tainted word? A survey experiment exploring framing effects of nonprofit overhead on donor decision
    (SAGE, 2021) Qu, Heng; Levine Daniel, Jamie; School of Public and Environmental Affairs
    Nonprofit overhead ratios (i.e. proportion of funds spent on fundraising and/or management) have long been used as a proxy for nonprofit efficiency. Prior studies find that donors negatively respond to charities with higher overhead. Using a survey experiment, we explore whether providing different types of information about overhead alleviates this donor aversion. When asked to choose between two organizations as donation recipients, donors preferred the organization with lower overhead. However, when presented with information that described the purpose of higher overhead as building long-term organizational capacity, an increased proportion of donors chose to give to the organization with higher overhead. Omitting the word “overhead” further increased the proportion of donors choosing the organization with higher overhead. This study adds to our understanding of overhead aversion and has practical implications for nonprofits that rely on voluntary private contributions to achieve their missions.
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    Is “Overhead” A Tainted Word? A Survey Experiment Exploring Framing Effects of Nonprofit Overhead on Donor Decision
    (Sage, 2021) Qu, Heng; Daniel, Jamie Levine; School of Public and Environmental Affairs
    Nonprofit overhead ratios (i.e., proportion of funds spent on fundraising and/or management) have long been used as a proxy for nonprofit efficiency. Prior studies find that donors negatively respond to charities with higher overhead. Using a survey experiment, we explore whether providing different types of information about overhead alleviates this donor aversion. When asked to choose between two organizations as donation recipients, donors preferred the organization with lower overhead. However, when presented with information that described the purpose of higher overhead as building long-term organizational capacity, an increased proportion of donors chose to give to the organization with higher overhead. Omitting the word “overhead” further increased the proportion of donors choosing the organization with higher overhead. This study adds to our understanding of overhead aversion and has practical implications for nonprofits that rely on voluntary private contributions to achieve their missions.
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    Tangible Information and Charitable Giving: When (Does) Nonprofit Overhead Matter?
    (2021) Qu, Heng; Levine Daniel, Jamie
    Nonprofit organizations in the U.S. have been under pressure to demonstrate their “worthiness” by minimizing overhead costs. Prior experiment studies find that donors respond negatively to high overhead costs when overhead information is highlighted. In reality, donors receive all sorts of information about nonprofit organizations from various channels. While high overhead has been found to reduce donors’ perceived impact and charitable giving, providing other types of tangible information can increase giving by enhancing donors’ perceived impact. When other types of information are available, to what degree overhead aversion still exists? We use two online survey experiments to examine how information on overhead costs and donation use affect giving intentions to a hypothetical charity in a single-organization and two-organization evaluation setting. Only a small proportion of people demonstrated overhead aversion when presented with a single organization. There was stronger evidence of overhead aversion when participants were asked to compare and choose between two organizations. Providing tangible information about what donations can buy mitigated overhead aversion among male donors. This study contributes to the growing experimental research on the relationship between overhead ratios and charitable giving, and provides practical insights for nonprofits hoping to ameliorate overhead aversion and increase donations.
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    Two essays on nonprofit finance
    (2016-05-06) Qu, Heng; Steinberg, Richard S.; Konrath, Sara; Ottoni-Wilhelm, Mark; Wu, Jisong; Greenlee, Janet
    This dissertation consists of two essays on nonprofit finance. Nonprofit finance concerns obtaining and managing financial resources to support the social purposes of nonprofit organizations. A unique feature of nonprofit finance is that nonprofits derive revenue from a variety of sources. Nonprofit finance thus involves answering two fundamental questions: What is the optimal combination of revenue sources that supports a nonprofit to achieve its mission? Where and how to obtain the revenue sources? The two dissertation essays address these two questions respectively. The first essay, titled “Modern Portfolio Theory and the Optimization of Nonprofit Revenue Mix,” is among the first to properly apply modern portfolio theory (MPT) from corporate finance to nonprofit finance. By analyzing nonprofit tax return data, I estimate the expected return and risk characteristics for five nonprofit revenue sources as well as the correlations among these returns. I use the estimates to identify the efficient frontiers for nonprofits in different industries, based on which nonprofit managers can select an optimal portfolio that can minimize the risk given a preferred level of service provision or maximize the return given a level of risk. The findings also pose a challenge to the predominant approach used in previous nonprofit finance studies (Herfindahl-Hirschman Index) and suggest that MPT is theoretically and practically more helpful in guiding nonprofit revenue management. The second essay, titled “Charitable Giving in Nonprofit Service Associations: Identities, Incentives, and Gender Differences,” concerns nonprofit resource attainment, specifically, how do decisionmaking contexts and framing affect donations. Membership in a service club is characterized by two essential elements: members’ shared interest in the club’s charitable mission; and private benefits that often come as a result of social interactions with other members, such as networking, fellowship, and fun. A laboratory experiment was designed to examine 1) whether membership in a service club makes a person more generous and 2) the effect of service club membership—stressing either the service or socializing aspects—on individual support for collective goods. The study finds that female individuals are the least generous when they are reminded of the socializing aspect of service-club membership.