FUNDRAISING AND THE INTERNET

Proliferation of the Internet has created new fundraising strategies for nonprofit organizations. Using an analytical model based on spatial competition with incomplete information, we examine how the establishment of a new online marketplace affects fundraising strategies of nonprofit organizations. The marketplace is considered as an online intermediary between donors and nonprofit organizations that offers two services: (i) access to a central database of donors, and (ii) certification of the quality of organizations. We show that the portfolio of services provided by the marketplace and their prices depend on the characteristics of the donor database as well as on the quality profile of organizations in the market. We identify which services the marketplace should offer and how it should price these services to maximize its net revenue. Key Word