Strategic positioning and the financing of nonprofit organizations: Is efficiency rewarded in the contributions marketplace?

This article addresses the question of whether operational efficiency is re cognized and rewarded by the private funders that support nonprofit organiz ations in fields ranging from education to social service to arts and beyon d, looking at the administrative efficiency and fundraising results of a la rge sample of nonprofit organizations over an 11-year period, we find that nonprofits that position themselves as cost efficient-reporting low adminis trative to total expense ratios-fared no better over time than less efficie nt appearing organizations in the market For individual, foundation, and co rporate contributions. From this analysis, we suggest that economizing may not always be the best strategy in the nonprofit sector.