Returns for Fundraising Expenditures in Muslim, Christian, Jewish and Other Religious Nonprofits from IRS Form 990: Underinvestment and the Limitations of Outside Fundraising Consulting

Abstract

This research analyzes whether religious organizations underinvest in fundraising compared to secular charities (as evidenced by excessive returns) and if hiring external fundraising consultants mitigates this gap. Using over one million IRS Form 990 returns from more than a quarter million public charities, ordinary-least-squares models predict the marginal effects of fundraising expenditures and professional fundraising fees on next-year’s contributions. Each additional fundraising dollar generates $6–$7 in additional contributions for secular or Jewish charities, $9 for Christian, $10 for religion-focused (NTEE-X), and $14 for Muslim organizations. Each additional dollar spent on professional fundraising fees yields $27 for secular charities, $76 for Christian, and $146 for Jewish organizations, but minimal returns for Muslim or NTEE-X nonprofits, indicating lower effectiveness of external consultants in those contexts. Results reveal significant but uneven fundraising underinvestment among faith-based organizations and show that contracting with outside fundraisers is not a one‑size‑fits‑all remedy.