The financial benefits of information technology adoption in nonprofit organizations

Information technology (IT) brings opportunities for nonprofit organizations. However, lack of funding sources is one of the main barriers to IT adoption in nonprofits, especially when nonprofits are operating with limited resources and pressures from funders to focus resources on beneficiaries. The financial returns of IT investment and whether IT adoption in nonprofit organizations is worth the money remains uncertain in the existing literature. Thus, this three-essay dissertation investigates the financial benefits of IT adoption in nonprofits.The first study uses 990-panel data of over 9,000 nonprofits from 2010 to 2017 to examine how IT expenses generate financial returns for nonprofit organizations. The results show that IT investment allows nonprofits to increase their financial capacity. IT expenditures positively impact total revenue, charitable donations, and program service income. Moreover, it improves management efficiency, but not fundraising efficiency or program service efficiency. The second study looks at social media as a low-cost and easy-to-adopt IT. To test the impact of social media engagement on fundraising campaign outcomes, this study samples 100 small nonprofits that disclosed their 2020 Giving Tuesday campaign performance on Twitter and analyzed their account activities using a computational social science method. The impact of account activeness and engagement on fundraising campaign outcomes is investigated in multiple periods - within the #GivingTuesday hashtag, one week, one month, one year, and since account establishment. Results find mixed effects of social media engagement on fundraising performance. The third study visits the problem from donors’ perspective. By conducting an online survey experiment among 1,040 participants, this study investigates the donors’ reaction to nonprofits’ IT budget, purposes, and performance. Results show that IT adoption performance has a positive impact on donations. Surprisingly, donors are more likely to donate to organizations with higher IT budgets. However, the detailed information disclosed about the purposes of IT projects negatively influences their willingness to donate. This dissertation contributes to the nonprofit management literature on IT, overhead costs, communication effectiveness, signaling and reputation building, public engagement, and individual giving. It also provides practical suggestions for nonprofit managers to adopt IT strategically and effectively.Ph.D.Includes bibliographical reference