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Annals of Operations Research

, Volume 221, Issue 1, pp 427–447 | Cite as

Impacts of earmarked private donations for disaster fundraising

  • Fuminori Toyasaki
  • Tina Wakolbinger
Article

Abstract

Faced with large humanitarian emergencies like the earthquakes in Haiti and Japan, aid agencies have to decide how to collect money for their relief work. They can either decide to establish a special fund for the emergency and allow for earmarked donations or they can only allow for unearmarked donations. In this paper, we analyze impacts of this decision on donors, aid agencies, and policy makers. To this end, we compare two prevalent fundraising modes using optimization models: fundraising with the option of earmarking donations and fundraising without an earmarking option. In the earmarked case, we consider a new fundraising challenge, excessive funds raised for certain disaster relief projects. We find that desirable fundraising modes for donors, aid agencies, and policy makers differ depending on levels of several parameters, including an aid agency’s utility of a dollar raised, the fundraising cost factor, and donors’ unit utility of donations. Allowing for earmarking leads to a lower overall fundraising cost percentage. For emergencies with strong media attention and donor interest, allowing for earmarking of donations is likely to reduce fundraising activities of organizations with low fundraising costs, while it is likely to encourage fundraising activities among organizations with high fundraising costs.

Keywords

Fundraising for disaster relief Non-profit organizations Humanitarian logistics Optimization 

Notes

Acknowledgements

This work was supported in full or in part by a grant from the Fogelman College of Business and Economics at the University of Memphis and a start-up grant from School of Administrative Studies at York University.

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Copyright information

© Springer Science+Business Media, LLC 2011

Authors and Affiliations

  1. 1.School of Administrative StudiesYork UniversityTorontoCanada
  2. 2.WU (Vienna University of Economics and Business)ViennaAustria

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