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Research Article

Journal of Public and Nonprofit Affairs


Vol. 7, No. 2

Nonprofit External Communications:


General Management, Public Relations, or
Fundraising Tool?
Jiwon Suh – The University of Texas at Arlington
Trang Hoang – University of Nebraska at Omaha
Imane Hijal–Moghrabi – University of Texas Permian Basin

In the nonprofit sector, effective communication with stakeholders is pivotal for


promoting a good reputation, gaining financial resources and, eventually, pursuing an
organization’s mission. Although nonprofits increasingly use and diversify their
communication channels, such as social media platforms, existing research falls short
of explaining how nonprofits institutionalize their different communication strategies.
Drawing on institutional theory, this study attempts to bridge this research gap by
exploring how nonprofits invest in their communication channels, both non-social
media and social media communications, using a sample of U.S. nonprofit museums.
The results of the study provide empirical evidence that nonprofits do not treat their
non-social media and social media communication channels in the same way. In
particular, a significant positive association between advertising expenses and social
media channels indicates that nonprofit museums institutionalize their social media
communication as the main function of public relations. Further theoretical and
practical implications of the results are also discussed.

Keywords: External Communications, Social Media, Nonprofit Museums

As nonprofit operations and activities largely depend on their external environment and on
the support of their funders and stakeholders (Barman, 2008; Callen et al., 2010; Froelich,
1999), nonprofit communication is pivotal to achieving organizational missions due to its
significant role in building relationships with stakeholders (Cornelissen, 2004). In general,
organizational communication, as Cornelissen (2004) argues, is a management function that
coordinates work internally to build a favorable relationship with various stakeholder groups.
More specifically, external communication is an important vehicle through which nonprofits
can engage with multiple stakeholders to acquire and retain donors and volunteers, to raise
support for the organization, and to build and promote its reputation within the community
(Carboni & Maxwell, 2015; McCaskill & Harrington, 2017; McKeever, 2013; Waters et al.,
2009).

While nonprofits utilize standard types of communication channels (e.g., website, direct mail,
email appeals, email newsletters), they have more recently taken to using various social media
platforms. For example, Facebook, Twitter, Instagram, and YouTube are the top social media
sites used by nonprofits, of which Facebook has emerged as the most popular platform in the
nonprofit sector (Nonprofit Marketing Guide, 2020). The 2020 Nonprofit Communication

Suh, J., Hoang, T., & Hijal–Moghrabi, I. (2021). Nonprofit external communications:
General management, public relations, or fundraising tool? Journal of Public and Nonprofit
Affairs, 7(2), 220–239. https://doi.org/10.20899/jpna.7.2.220–239
Journal of Public and Nonprofit Affairs

Trends Report showed that 53% of nonprofits manage an active Facebook group while 42% of
them use Instagram on a weekly basis (Nonprofit Marketing Guide, 2020). Donors also
consider social media to be a critical communication tool. The 2018 Global Trends in Giving
Report found that 29% of online donors claimed that social media was the biggest inspiration
for them to donate (Nonprofit Tech for Good, 2018b).

Despite its important role and usage, studies on organizational communication, specifically in
the nonprofit sector, have paid little attention to theoretical development (Lewis, 2005).
Rather, as Lewis (2005) observed, “these studies have most often left unexamined and
untested theories relating to the specific unique features of NPOs” (p. 241). A recent study
covering 50 years of organizational communication research also found that the majority of
studies in organizational communication have focused mainly on for-profit firms, leaving the
nonprofit sector unexplored (Garner et al., 2016).

Furthermore, the aforementioned report shows that the number of full-time employees in
communications has not been growing despite the workload in the nonprofit sector continuing
to grow (Nonprofit Marketing Guide, 2020). Given the fast growth of new communication
tools and demand for better communications in the nonprofit sector, understanding how
nonprofit organizations use communication channels is a timely and critical research topic.
Scholars have claimed that communications are the key component in marketing strategies.
They also have a significant impact on marketing outcomes and satisfaction (Mohr & Nevin,
1990). In contrast, scholars and nonprofit top management may see the communication
function as part of administrative spending (Greggory & Howard, 2009).

Given this mixed perspective on the function of nonprofit external communication, along with
the lack of academic research on this topic, our research seeks to fill that gap by focusing on
nonprofit museums and exploring how they define the function of their communication.
Nonprofit museums have long been engaged in communication to increase visitors, product
sales, and customer satisfaction (Budge & Burness, 2018; Camarero & Garrido, 2009; Gilmore
& Rentschler, 2002; Tobelem, 1997). Gilmore and Rentschler (2002) have emphasized that
museums have become more focused on “museum–audience interactions and relationships”
to cultivate repeat visitors (p. 745). Recent studies also found that museums use social media
to build awareness and to engage with communities and visitors, as social media provide
personal connections and experiences (Budge & Burness, 2018; Chung et al., 2014).

Considering that museums frequently communicate with their external stakeholders,


including the communities that they directly serve, studying museums provides a substantive
insight into the utilization of communication channels in the nonprofit sector. Expanding the
boundaries of institutional theory to nonprofit museum communication, this paper focuses on
general communication functions (Cornelissen, 2004; Garner et al., 2016) and aims to answer
two questions: (a) Do nonprofit museums operate their external communication as a general
managerial function or as a specialized function? (b) If external communication is handled as
a specialized function, which function is it handled as–public relations or fundraising?

To address these research questions, we begin this paper with a review of the principles of
institutional theory and its application to organizational communication. We then present
nonprofit communication channels, including social media. This section is followed by our
methodology and findings. Lastly, we conclude with a discussion of the implications of the
findings and offer a future research agenda.

Literature Review

Institutional Theory and Organizational Communication

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Nonprofit External Communications

Organizations have increasingly committed resources to external communication in recent


decades (Sandhu, 2009). Explaining this phenomenon, institutionalist scholars have argued
that organizations view communication strategies as fundamental to organizational
effectiveness because of the demands of their external environments (Grunig & Grunig, 2008;
Sandhu, 2009). According to Garner and his colleagues (2016), Institutional Theory was the
sixth most employed theory in organizational communication research between 2000 and
2013. However, we still do not know how Institutional Theory applies to nonprofit
communications (Garner et al., 2016). In organizational communication research,
institutional theory “does not look at a single organization but instead at a specific field of
organizations created by social and communicative mechanisms leading to the establishment
of new practices” (Sandhu, 2009, p. 74). This theory posits that organizations are influenced
by societal norms and expectations (institutional pressure), which lead them to develop
structures and practices, including communication strategies (Flanagin, 2000; Meyer, 2008;
Sandhu, 2009).

Scott (2008) proposes a three-pillar model of institutions: (1) regulative pillar, (2) normative
pillar, and (3) cultural-cognitive pillar. He further argues that, “Institutions are comprised of
regulative, normative, and cultural-cognitive elements that together with associated activities
and resources provide stability and meaning to social life” (Scott, 2008, p. 48). The underlying
mechanisms of institutionalization in these three pillars are ‘requirement by law or rule’
(regulative pillar), ‘demands by publics or other constituents’ (normative pillar), and ‘copying
or imitating of successful organizations’ (cultural-cognitive pillar) (Sandhu, 2009). In short,
organizations can be forced to institutionalize certain types of practices and behavior by either
formal requirements or informal social pressures (Zorn et al., 2011).

The cultural-cognitive pillar posits that such societal expectations and culturally-shared
beliefs lead organizations to slowly adopt certain rules and behaviors, and routinize them
(Hasselbladh & Kallinikos, 2000). For instance, organizations often observe other
organizations and benchmark new systems or practices, such as with social media in recent
years (Zorn et al., 2011). Additionally, this pillar includes ‘taken-for-granted’ assumptions that
organizations should communicate with their stakeholders (Sandhu, 2009). Organizations
possess their own communication functions even if they do not build them strategically.

Drawing on Grandien and Johansson’s (2012) argument that the structure of communication
function differs depending on the sector, field, and organizational characteristics, it is
important to see how nonprofits’ organizational communication is handled. An
institutionalized communication function typically resides in a formal structure, allowing the
communication function legitimacy and power (Grandien & Johansson, 2012). Research also
argues that when certain communication functions are perceived as valuable assets within an
organization, then these functions are formally structured to maximize influence (Cornelissen,
2004).

Similarly, the power-control perspective on organizational communication posits that the


structure of communication functions is determined by managerial choices (Cornelissen,
2004; Grandien & Johansson, 2012). By the same token, Ihlen (2007) and Sandhu (2009)
have proposed indicators of institutionalization. Specialization and routinization describe how
communication functions are organized. An already routinized function does not require
many resources, but “[t]he higher the level of specialization, the more institutionalization can
be expected” (Sandhu, 2009, p. 85).

In a similar vein, independence is a different but related indicator of institutionalization. If a


given function within an organization is independent rather than dissolved in other functions,
it is more likely to be institutionalized (Ihlen, 2007). When communication is viewed as
specialized and as a highly valuable asset within an organization, it is more likely to be treated
as an independent function (separate department) with designated resources, including

222
Journal of Public and Nonprofit Affairs

personnel and financial supports (Berger, 2005; Cornelissen, 2004). Some nonprofit
organizations may view external communication as a general and routinized function, while
others may treat it as a specialized and independent practice such as fundraising or public
relations.

External Communication in the Nonprofit Sector

As donors and funders increasingly demand more information about organizational plans and
activities (Salamon, 2002), the utilization of different communication channels enables
nonprofits to better provide information to their key stakeholders. Particularly, effectively
implementing communication strategies, including the use of social media, enables nonprofit
organizations to build trust and engage with stakeholders, to increase donations, and to retain
dedicated donors (Kent & Taylor, 1998; Levine & Zahradnik, 2012). Also, the development of
the Internet and advanced technology has opened new ways for nonprofits to communicate
with communities and stakeholders. Scholars emphasized the need to take advantage of
Internet communication channels to communicate missions and programs of nonprofits
(Corby & Sowards, 2000; Waters, 2007).

On the other hand, organizational communication also incurs costs, including the expense of
hiring professionals or training staff to manage communication strategies. While some
nonprofits, especially those with a high level of financial and human resource capacity, are
better equipped than others to invest in communication as a means to boost their
organizational image and reputation among donors and stakeholders (Zorn et al., 2013), the
lack of human resources may be a big hurdle for the adoption of advanced media
communication in small nonprofits (Briones et al., 2011). Also, whereas nonprofits may be
hesitant to invest in their communication strategies because donors prefer to see nonprofit
organizations spend donations on services and programs (Sloan & Grizzle, 2014), they
increasingly recognize the importance of marketing communication that encourages action
(e.g., donations) (Anheier, 2014; Nonprofit Marketing Guide, 2020).

Communication scholars posit that public relations and marketing communication are
distinctive functions, and argue that “marketing deals with markets, while public relations
deal with all the publics” (Cornelissen, 2004, p. 38). Likewise, marketing scholars also agree
that marketing communication is directly related to company profits, while public relations
enhances a firm’s reputation and image (Kotler & Mindak, 1978). Specifically, in the case of
museums, Gürel and Kavak (2010) argue that “while public relations is responsible for
generating favourable publicity, images and attitudes in relation to patrons, sponsors, visitors
and other stakeholders, marketing is responsible for attracting and satisfying the same
publics” (p. 44). Such a traditional view of the distinction between public relations and
marketing communications has been widely accepted by scholars.

However, the distinction between public relations and marketing communications is


particularly challenging in nonprofit studies. Existing research considers communication as
the result of problem recognition and involvement between the public and the organization
(McKeever, 2013; McKeever et al., 2016). According to McKeever (2013), when people are
aware of an issue or connect with the issue, they seek more information from organizations
that share their concerns. The desire to get involved or to seek information may lead
individuals to form an emotional bond with those organizations. Therefore, active
involvement such as volunteering or donating can be strengthened by continuing
communications. As such, organizational communications can be involved in both public
relations and marketing simultaneously as these practices are closely intertwined.
Notwithstanding, the distinction between public relations and fundraising is important
because it enables scholars and practitioners to better understand the strategic view of
communications that are held by nonprofits.

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Nonprofit External Communications

In the nonprofit sector, communication in fundraising activities is generally considered a


marketing communication because of its donation-solicitation activities, while advertising is
regarded as an essential part of public relations (Andreasen, 2012; Cornelissen, 2004). Several
decades ago, Kotler and Mindak (1978) specifically argued, “[i]n nonprofit organizations
particularly (e.g., hospitals, colleges, and museums), where public relations is a well-
established function, marketing is emerging as a ‘hot’ topic” (p. 13). However, ever since Kotler
and Mindak’s argument, scant research has explored how nonprofit organizations
institutionalize their external communication along with technological advances such as social
media platforms.

Nonprofit Social Media Communication

In recent years, the for-profit sector has paid great attention to social media platforms.
Companies widely utilize social media, and scholars have endeavored to explore the
theoretical and practical implications of these media channels (Khang et al., 2012). According
to Khang et al. (2012), the majority of social media research in the field of business considers
social media to be a marketing and advertising tool. As is consistent with the distinction of
definitions between marketing and public relations, scholars have argued that “compared to
marketing, advertising places greater emphasis on the persuasive power of social media (e.g.,
how to grab consumers’ attention, build brand image, and garner greater attention, interests,
and desire), while marketing is more interested in social media’s potential for action” (Khang
et al., 2012, p. 292).

Nonprofit scholars also have been increasingly considering social media as a research topic,
including in terms of building relationships (Briones et al., 2011; Campbell et al., 2014; Clark
et al., 2016; Svensson et al., 2015; Waters et al., 2009), fundraising (Castillo et al., 2014;
Saxton & Wang, 2014; Zhong & Lin, 2018), advocacy (Guo & Saxton, 2018), and accountability
(Saxton & Guo, 2011). The stream of research focusing on stakeholder relationships generally
uses theoretical frameworks in public relations. Furthermore, it claims that social media
provides a variety of ways for organizations to encourage the public to become involved with
organizations (Clark et al., 2016; Waters et al., 2009).

In contrast, studies focusing on fundraising or marketing use various theories stemming from
the fields of psychology and microeconomics (Hausmann, 2012; Zhong & Lin, 2018). Further,
some scholars make a linkage between the two research streams – stakeholder relationship
and marketing efforts (Levine & Zahradnik, 2012; Waters et al., 2009). Their research has
shown that nonprofits increasingly utilize social media and other Internet-based
communication channels to engage with stakeholders as part of their entrepreneurial
management and a market-oriented approach to increasing organizational responsiveness
and financial viability. Given that previous studies have been narrowly-focused, it is worth
noting that we still need a deep understanding of external communication that is theoretically
grounded.

Hypotheses: Nonprofit Museums Communication

Museums, generally, provide services to the public through essential activities such as
collection, preservation, and education (Camarero & Garrido, 2009). Unlike commercial
museums that produce mass culture, nonprofit arts organizations “produce high culture,
which involves labor-intensive technologies” (DiMaggio, 1987, p. 200). Therefore, although
some nonprofit museums require an admission fee, a significant number of museums charge
no fee for exhibitions not only as “a way to fulfill social responsibility but also as a strategy to
cultivate future audiences in an environment of declining participation in the arts” (Kim et al.,
2018, p. 140).

224
Journal of Public and Nonprofit Affairs

This study examines the relationship between nonprofit organizations’ expenses and external
communications by specifically focusing on nonprofit museums in the U.S. The selection of
nonprofit museums advances this study on numerous fronts. The nonprofit sector covers a
wide variety of fields (e.g., social service, religion, health care, and education). Moreover, the
scope of the arts and culture subfield contains various types of organizations such as
symphony orchestras, dance companies, theaters, museums, and zoos that have different
internal and external environments (O’Neill, 2002). Considering that the structure of
communication function may vary depending upon the field, it is necessary to focus on a
specific type of organization (nonprofit museums in this paper’s case) rather than expanding
the type of organizations (all arts and culture nonprofits), or including auxiliary organizations
(DiMaggio & Powell, 1983; Grandien & Johansson, 2012; O’Neill, 2002).

Additionally, nonprofit museums present similarities and dissimilarities with other nonprofits
that make studying their communication strategies interesting. Similar to other nonprofits,
nonprofit museums have multiple stakeholders and their communication strategy can be
affected by organizational priorities, resource allocation, the public, communities, and
institutional structure (Gainer & Padanyi, 2002; Lee, 2005; Liao et al., 2001). However,
among nonprofit sectors, nonprofit museums have demonstrated remarkable growth, and are
unique in terms of the services they provide and the clients they serve (Camarero & Garrido,
2009; Tobelem, 1997). Museums provide a variety of programs, ranging from exhibitions and
displays, educational programs, to preserving history, culture, and the arts.

Unlike other types of nonprofits, nonprofit museums often compete with other museums,
including for-profit organizations that provide similar services, for more attention and
participation (O’Neill, 2002). At the same time, nonprofit museums serve not only local
communities but also all visitors including travelers. Under these circumstances,
communications play critical roles in building organizational images, connecting with visitors,
volunteers, and customers, as well as in gaining reputation. Therefore, understanding the
relationship between resource allocation and communication strategies helps explain how
nonprofit museums institutionalize their communication functions.

Non-Social Media Communication

As communication is an important way for nonprofit museums to connect with the public and
stakeholders to fulfill their operating purposes, the resource allocation or spending decisions
are essential to ensure that these organizations have enough resources to carry out their
missions (Weikart et al., 2013). Therefore, one way to understand how nonprofit museums
institutionalize their organizational communication is to examine the types of expenditures
they use for communication. Scholars agree that accounts quantify organizational practices
and reflect realities when an organization institutionalizes rules and structures (Carruthers,
1995; Liguori & Steccolini, 2012). As the regulative pillar of institutions, the Financial
Accounting Standards Board (FASB) sets standards of financial accounting for nonprofit
organizations (Scott, 2008; Weikart et al., 2013). Based on these standards, nonprofit
organizations identify and allocate budgets into categories: administration (support),
fundraising, and program (Weikart et al., 2013).

Nonprofit museums may use administrative costs for communication when they treat certain
channels as a part of general management, not as a specialized function. Non-social media
channels (e.g., phone, e-mail, and e-newsletters) deliver a wide variety of content and
encounter all types of stakeholders from the board to the public. For instance, some may call
a museum when they have a general question (e.g., admission fee, open hours), while others
make more specific inquiries (e.g., donations). Also, museums use e-newsletters for varied
purposes: sending welcome messages, delivering information about new exhibitions or
activities, and soliciting donations. Besides, non-social media channels often do not target a
specific group or audience. Therefore, we hypothesize that non-social media channels are

225
Nonprofit External Communications

treated as a support function and that museums are more likely to use money from their
administrative budgets for these channels.

Hypothesis1: Administrative expenses ratio will be positively associated with the


number of non-social media channels.

Social Media Communication

Nonprofit museums may utilize advertising expenditures or fundraising expenditures for


external communication if they operate certain communication channels as a specialized
function. As Gilmore and Rentschler (2002) found, museums not only focus on the traditional
(custodial preservation) roles but also recognize the significance of market-orientation.
Previous research has found that institutional pressure is one of the factors leading
organizations to adopt communication technologies such as websites or social media
(Flanagin, 2000; Zorn et al., 2011). In particular, Zorn and colleagues (2011) argue that
normative pressure (normative pillar of institutional theory) leads nonprofits to adopt
communication technologies by benchmarking other organizations (cultural-cognitive pillar
of institutional theory). In this sense, nonprofit museums’ adoption of social media can also
be explained by institutional theory as they are under pressure of social trends and
expectations (Gilmore & Rentschler, 2002; Kotler et al., 2008).

As government grants to museums have been decreasing, museums have been engaging in
more customer-oriented approaches to gain more revenues (Kotler et al., 2008). Yet, previous
research has found that museums’ customer-oriented activities and events were merely
successful in building awareness and that these activities do not necessarily promote revenues
(Camarero & Garrido, 2009). Likewise, nonprofit organizations primarily use social media
channels to provide information and to build awareness rather than to request actions such as
donations that require a higher level of engagement with organizations (Lovejoy & Saxton,
2012). Scholars have considered social media platforms as the cornerstone of building
relationships by two-way communications (Getzendanner, 1999; Grunig & Hunt, 1984;
Lovejoy & Saxton, 2012; Waters, 2007). Thus, we hypothesize that nonprofit museums utilize
social media channels for public relations rather than fundraising.

Hypothesis2: Advertising expenses ratio will be positively associated with the number
of social media channels, the number of Facebook posts, and the number of Facebook
engagements.

Hypothesis3: Fundraising expenses ratio will not be associated with the number of
social media channels, the number of Facebook posts, and the number of Facebook
engagements.

Data and Method

Sample and Data Collection

We collected nonprofit museum data from several sources: (1) the 2013–2014 fiscal year of
NCCS data, (2) official museum websites, and (3) six social media platforms. First, financial
data from the 2013–2014 fiscal year were obtained from the NCCS: Statement of Income
Statistics (SOI)–GuideStar National Nonprofit Research Database. The museums in the
sample have net assets over $10 million. The initial sample contains 505 museums, of which
27 museums were dropped over the course of cleaning the data. One museum with total
fundraising expenses exceeding total expenses was excluded, resulting in a sample size of 477
museums.

226
Journal of Public and Nonprofit Affairs

We acknowledge that some researchers are dubious about the credibility of the NCCS data
derived from the IRS 990 forms. Although research has found that the “IRS 990 Return to be
a generally reliable source of financial data” (Froelich & Knoepfle, 1996, p. 50), nonprofit
organizations might shift their expenses into other items due to a lack of guidelines and due
to the pressure to reduce overhead expenses (Froelich & Knoepfle, 1996). Furthermore,
financial regulations are a significant challenge encountered by nonprofits, as small nonprofits
are particularly unlikely to have employees who have extensive knowledge of financial
management, tax-exempt status, and tax returns (St. Clair, 2016).

Despite such internal and external predicaments that might challenge the validity of the NCCS
data, we used these data in our analysis for two reasons. First, as Froelich & Knoepfle (1996)
argued, the data are a reliable source of financial data. Researchers have been using the NCCS
data for decades to conduct nonprofit financial studies and it “has been the only source of data
on nonprofit organizations that vary by type and size” (Kim & Charles, 2016, p. 338). Second,
the museums that we use for this study are relatively large nonprofits with more than 10
million dollars of net assets. Large nonprofits are more likely to be regulated by federal and
state governments. They are also more likely to be assessed by their boards, charity watchdog
groups, and donors (Calabrese, 2011; St. Clair, 2016; Ott & Dicke, 2012). Consequently, they
are more likely to report the correct financial statements to the IRS.

Information regarding the external communication channels of organizations was collected


mainly from the official websites of the museums in our sample and from their social media
pages. To collect information on communication channels, such as phone, e-mail, and e-
newsletter, from the official museum websites in the 2013 fiscal year, we used an approach
established in the literature (Levine & Zahradnik, 2012; Nah & Saxton, 2012; Saxton & Wang,
2014), using the Internet Archive’s Wayback Machine to determine whether or not each
organization was using such channels. All museums have their own official websites in the
sample.

To collect each museum’s official social media profiles on platforms including Facebook,
Twitter, Instagram, YouTube, Flickr, and Google Plus, we first identified a museum’s profile
account through its website and Google search interfaces. Then, it was determined whether
each museum operated such social media channels during the 2013 fiscal year. The number of
Facebook posts, likes, comments, and shares were collected by the Facebook application
programming interface (API) using a customized R code.

For this study, we chose the 2013–2014 fiscal year, because that is the fiscal year for which the
most up-to-date nonprofit financial data are available (e.g., NCCS: Statement of Income
Statistics (SOI)). Although there might be some skepticism given that social media has been
changing rapidly since 2014, and that social media usage in the 2013–2014 fiscal year might
not reflect current social media trends, previous research has found that there are some
similarities and consistencies in the types of social media that museums have utilized over the
years. Facebook and Twitter are the two main platforms that are utilized the most by
nonprofits and museums, with YouTube and Instagram the next most used platforms (Budge
& Burness, 2018; Chung et al., 2014; Nonprofit Marketing Guide, 2020; Nonprofit Tech for
Good, 2018a). Our data also reflect these ongoing trends (see Figure 1).

Dependent Variables

This paper uses six dependent variables. The first dependent variable is the number of non-
social media channels that a given institution utilized. The channels include phone, e-mail,
and e-newsletter that are typically used by museums. We did not count the organizational
official website as a communication channel because all museums in the sample have their
own websites. The second dependent variable is the number of social media channels utilized,
including Facebook, Twitter, Instagram, YouTube, Flickr, and Google Plus. Facebook was the

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Nonprofit External Communications

Figure 1. Nonprofit Museums’ Social Media Usage


450 421 (88.3%)
385 (80.7%)
400

350

300

250
194 (40.7%) 185 (38.8%)
200

150

100
54 (11.3%)
26 (5.5%)
50

0
Facebook Twitter Youtube Instagram Flickr Google plus

most popular social media platform (421 museums, 88.3% of the sample), followed by Twitter
(385 museums, 80.7% of the sample) as shown in Figure 1. Due to its popularity among the
museums in the sample, we chose Facebook to be the basis for the other dependent variables.
The third variable is the total number of Facebook posts, while the remaining three variables
are the total number of Facebook likes, comments, and shares, respectively, during the 2013
fiscal year.

Independent Variables

To test Hypothesis 1, we use the administrative expenses ratio. The administrative expenses
ratio is defined as total administrative expenses divided by total expenses (Calabrese, 2011;
Frumkin & Kim, 2001). As to the second independent variable to test Hypothesis 2, we use the
advertising expenses ratio to measure organizational public relations efforts. This variable is
calculated using advertising expenses divided by total expenses. Lastly, to test Hypothesis 3,
we use the fundraising expenses ratio to measure organizational marketing efforts. This is
calculated using fundraising expenses divided by total expenses (Frumkin & Kim, 2001).
These three independent variables were transformed using natural logarithms to address
positive skewness.

Control Variables

This paper includes several control variables. Since larger organizations are more likely to
adopt advanced online practices than smaller organizations, this paper takes the natural
logarithm of total assets to control for organization size, as per previous studies (Calabrese,
2013; Clark et al., 2016; Saxton & Guo, 2011; Yan et al., 2009). Organization age is the number
of years since museums were granted 501(c)(3) status. Metropolitan is a dummy variable
indicating whether a museum is located in a metropolitan area (1 = metropolitan area, 0 =
otherwise). Report is also a dummy variable indicating whether museums disclose their
performance and activities in the annual report on their official website (1 = annual report, 0
= otherwise). Nonprofit organizations that post their annual reports on their websites are

228
Journal of Public and Nonprofit Affairs

Table 1. Communication Channels


Non-Social Media Social Media
(Phone, E-mail, E-newsletter) (Facebook, Twitter, YouTube,
Instagram, Flickr, Google plus)
Number Frequency Percent Cum. Frequency Percent Cum.
of Percent Percent
Channels
0 1 0.21 0.21 38 7.97 7.97
1 16 3.35 3.56 49 10.27 18.24
2 141 29.56 33.12 118 24.74 42.98
3 319 66.88 100.00 143 29.98 72.96
4 97 20.34 93.29
5 29 6.08 99.37
6 3 0.63 100.00
Total 477 100.00 477 100.00

more likely to respond to their stakeholders and to disclose financial and operational
information (Saxton & Guo, 2011).

Model Specification

All three independent variables (administrative expenses ratio, advertising expenses ratio,
and fundraising expenses ratio) and one control variable (organizational size) were
transformed using natural logarithms since they are not normally distributed and are severely
right-skewed. We use a Collin Test, a preliminary test that confirms that there is no
multicollinearity issue among the independent variables. We use Poisson and negative
binomial regression for the analysis. The first two dependent variables (the number of non-
social media channels and the number of social media channels) are counts, and the Collin
Test confirms that Poisson regression better fits with these dependent variables than negative
binomial regression. For the latter four dependent variables (the number of Facebook posts,
likes, comments, and shares), we use negative binomial regression since these variables are
over-dispersed count data. Another preliminary test using a likelihood ratio (LR) Test also
confirms that negative binomial regression better fits with these dependent variables (Long &
Freese, 2014).

Findings

Descriptive Statistics

As shown in Table 1, 319 museums (approximately two-thirds of the sample) had all three
types of non-social media channels, while one museum did not have any of these channels in
the 2013 fiscal year. Table 1 also reports that approximately 55% of museums operate two or
three social media channels. The average number of social media channels is 2.65, with a low
value of 0, indicating that the museum does not use social media, and a high value of 6,
indicating that the museums use all six social media channels, including Facebook, Twitter,
Instagram, YouTube, Flickr, and Google Plus (see Table 2).

Table 2 shows that the average number of Facebook posts is 369 per nonprofit, indicating that
a museum uploads a post per day. The average number of users’ engagement via Facebook
contained several extreme values as we expected, ranging from zero to 18,806,494 for likes,
zero to 98,092 for comments, and zero to 569,702 for shares per organization. The average
percentage of administrative expenses, advertising expenses, and fundraising over total
expense is 18%, 2.5%, and 7.8%, respectively. The average age of the museum is 40 years old.

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Table 2. Descriptive Analysis (dollars in thousands, %)


Mean Median Std. Min Max
Dev.
Organizational Communication
Number of non-social media
2.63 3 0.56 0 3
channels
Number of social media channels 2.65 3 1.33 0 6
Number of Facebook posts 369 304 315 0 2,040
Number of Facebook engagements
Likes 28,209 4,467 135,626 0 1,880,694
Comments 1,310 320 5,335 0 98,092
Shares 6,886 1,069 38,172 0 569,702

General Management
Administrative expenses 2,210 703 10,451 0 209,649
Administrative expenses ratio 18.00 15.40 14.90 0 100
Public Relations
Advertising expenses 339 104 1,248 0 23,665
Advertising expenses ratio 2.50 2.00 2.70 0 24.20
Fundraising
Fundraising expenses 865 339 2,562 0 47,143
Fundraising expenses ratio 7.80 6.70 6.60 0 47.50
Total expenses 14,494 4,364 61,549 47 1,162,330

Size (natural log of total assets) 17.50 17.10 1.13 16.10 22.10
Age 40 35 24 0 92
Metropolitan area 0.71 0.45 0 1
Annual report 0.35 0.48 0 1
Observations 477

71% of museums are located in metropolitan areas, and 35% of organizations disclose annual
reports on their websites.

Poisson and Negative Binomial Regression Results

Our Poisson and negative binomial regression results are presented in Table 3. Since our
models use natural logarithms for all three independent variables (administrative expenses
ratio, advertising expenses ratio, and fundraising expenses ratio) and one control variable
(organizational size), the sample size was reduced to 369 museums. The first three models
demonstrate the relationship between administrative, advertising, and fundraising expenses
and the number of non-social media channels, social media, and Facebook posts. The last
three models reveal the effects of the changes in organizational administrative, advertising,
and fundraising expenses on the count of Facebook engagement activities, including likes,
comments, and shares.

We found that an increase in administrative expenses is not significantly related to the number
of non-social media channels, but is negatively associated with the expected count of social
media channels (Hypothesis 1 not supported). Conversely, an increase in advertising expenses
is positively associated with the expected count of social media channels and the count of
Facebook posts (see Table 3). As these findings suggest, an increase in advertising expenses is
positively correlated with social media usage, which implies that museums often consider their
communication channels, especially social media, to be part of their advertising efforts
(Hypothesis 2 supported).

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Table 3. Poisson and Negative Binomial Regression Results


Number of Number Number Number of Facebook Engagements
Non-Social of Social of
Media Media Facebook Likes Comments Shares
Channels Channels Posts
(b/se) (b/se) (b/se) (b/se) (b/se) (b/se)

Administrative -0.0089 -0.0863+ -0.0268 -0.1537 -0.1220 -0.0732


expenses ratio (0.0170) (0.0458) (0.0867) (0.2081) (0.1979) (0.2095)
(ln)

Advertising 0.0101 0.0555** 0.1285** -0.0070 0.0698 0.0143


expenses ratio (0.0086) (0.0211) (0.0421) (0.1368) (0.1228) (0.1121)
(ln)

Fundraising 0.0096 0.0351 0.0645 -0.3004+ -0.3280*** -0.3504+


expenses ratio (0.0115) (0.0329) (0.0590) (0.1649) (0.0976) (0.1914)
(ln)

Org size (ln) 0.0178* 0.1002*** 0.1191*** 0.6150*** 0.4966*** 0.6575***


(0.0078) (0.0200) (0.0339) (0.0818) (0.0634) (0.0832)
Age 0.0003 -0.0013 -0.0002 -0.0092* -0.0060 -0.0098*
(0.0004) (0.0009) (0.0018) (0.0044) (0.0041) (0.0045)
Metropolitan 0.0024 0.0036 0.0608 -0.2869 -0.2754 -0.1062
(0.0205) (0.0517) (0.1030) (0.3164) (0.2679) (0.2987)
Report 0.0141 0.0659 0.1211 -0.0564 -0.2122 -0.2091
(0.0194) (0.0438) (0.0830) (0.2295) (0.1864) (0.2191)

N 369 369 369 369 369 369


Log Likelihood -548.53 -625.50 -2578.10 -3827.60 -2831.80 -3294.40
χ2 12.31+ 45.17*** 28.16*** 114.62*** 121.73*** 128.26***
Note: + p<0.10, * p<0.05, ** p<0.01, *** p<0.001

Interestingly, the results show that an increase in fundraising expenses is negatively


associated with the expected count of Facebook engagement activities, including Facebook
likes, comments, and shares, while there is no significant relationship between either
administrative expenses and the number of Facebook engagement activities nor between
advertising expenses and Facebook engagement activities. This finding suggests that as a
fundraising budget increases, a nonprofit museum might favor other fundraising activities or
events in order to raise donations. However, considering that social media offers nonprofits a
tool to communicate and to engage with their stakeholders for fundraising without additional
costs, organizations might increasingly turn to social media platforms to solicit donations
when their budget for fundraising is decreasing. In addition, larger museums, which often
have higher levels of financial capacity and human resources, are more likely to invest in their
communication, including both non-social media channels and social media. These
organizations are also more likely to engage with their stakeholders on social media platforms.

In sum, our study’s findings shed the light on how nonprofits operate their communications.
First, we found that there is a positive relationship between social media usage (number of
channels and Facebook posts) and advertising expense. Second, the results show that
fundraising expense is negatively associated with the number of Facebook engagements (likes,
comments, and shares). Lastly, we found that larger nonprofit museums tend to use more
communication channels, both non-social media and social media, and engage more on
Facebook.

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Discussion

Drawing on Institutional Theory (Hasselbladh & Kallinikos, 2000; Meyer, 2008), and
extending this theory to nonprofits’ communication (Sandhu, 2009; Zorn et al., 2011), this
study provides insights into how nonprofits institutionalize their communication functions.
Using data from a sample of 477 U.S. nonprofit museums, this study examines the relationship
between different nonprofits’ expenditures and their communication strategies–both non-
social media and social media communications–an angle not being paid due attention in
recent studies (e.g., Budge & Burness, 2018; Carboni & Maxwell, 2015; Clark et al., 2016; Guo
& Saxton, 2018; Maxwell & Carboni, 2016; McCaskill & Harrington, 2017; Svensson et al.,
2015; Xu & Saxton, 2019; Zhong & Lin, 2018).

The results of the study show widespread use of social media and a diffusion of social media
platforms among the majority of the museums in our sample. Findings also indicate that these
digital communication strategies have not replaced non-social media communication
channels. Even though the use of social media has become more common, the usage of non-
social media channels such as mail, email, phone or newsletters still plays an important role
in organizational efforts to reach out to donors, visitors, and the general public. We found that
in about two-thirds of the museums, non-social media communication strategies are alive and
coexist with the newly emerged communication platforms. This hybridization of
communication strategies is critical to the survivability of organizations. This is particularly
true for nonprofits that target different age groups. While these organizations strive to appeal
to the younger, digital generation from which future donors, volunteers, and activists could be
recruited, they do not want to risk alienating “the older generation which makes up the
majority of the volunteer and donor base” (Briones et al., 2011, p. 40).

The findings further reveal that the museums do not use their non-social media
communication channels in the same way as they use their social media communication
platforms. These museums treat their social media communications as specialized,
independent functions (namely, public relations), not as part of a broader, general
management function. This is evidenced by the use of advertising expenditures to fund social
media activities. Moreover, because specialization and independence are both viewed as
indicators of institutionalism (Ihlen, 2007; Sandhu, 2009), this finding further implies that
the public relations of social media activities are more likely to be institutionalized by the
museums in our sample.

Despite the importance of fundraising as a proactive marketing tool, the museums in our
sample seem to place greater emphasis on advertising as the “persuasive power of social
media” (Khang et al., 2012, p. 292). This observation is confirmed with the significant, positive
relationship between advertising expenditures and the number of social media platforms and
the number of Facebook posts. Thus, in line with previous research (Briones et al., 2011;
Hackler & Saxton, 2007; Kent & Taylor, 1998; Levine & Zahradnik, 2012; Waters et al., 2009),
this study accentuates the critical role played by social media in boosting the image and
reputation of nonprofits, building social capital, and cultivating relationships with nonprofits’
stakeholders and the general public.

Due to its strategic role in fulfilling mission-related goals, the advertising function of public
relations can be regarded as part of the nonprofits’ entrepreneurial management and market-
oriented approach, designed to promote organizational responsiveness and to enhance
financial viability (Levine & Zahradnik, 2012; Waters et al., 2009). In this sense, the use of
social media as a market-oriented activity offers nonprofits the opportunity to manage their
financial challenges by attracting and maintaining donors and generating more earned
income, while at the same time expanding their social impact and becoming more flexible in
responding to the needs of their stakeholders and the general public.

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The added value of this study lies in the fact that this study went beyond the narrow distinction
between public relations (advertising) and fundraising (marketing) communication activities.
Based on the finding that the fundraising expenses ratio is negatively related to the number of
Facebook engagements (likes, comments, and shares), one can argue that nonprofit museum
advertising communication may complement the fundraising activities or vice versa
(Cornelissen, 2004). It may be even possible that social media has become an attractive
resource for nonprofit museums when operating on a tight budget, as social media channels
effectively enhance the communication between museums and their stakeholders while
costing little.

As to organizational size, results show that organizational size was found to be positively
related to the adoption and use of social media platforms and engagement activities. This
finding is consistent with the organizational innovation literature (Damanpour, 1991, 1992,
1996; Damanpour & Schneider, 2006; Rogers, 1995) that views organizational size as a
“surrogate measure of several dimensions that lead to innovation” (Rogers, 1995, p. 379). The
size of an organization tells us about its financial, technical, and human resources capabilities.
In this sense, larger organizations are more likely to adopt new practices and tools because
they possess more sophisticated capacities and varied facilities that enable them to adopt new
ideas and practices and, ultimately, to put them into effect (Damanpour, 1991, 1992, 1996;
Damanpour & Schneider, 2006). Moreover, large organizations are more likely to tolerate the
potential loss associated with unsuccessful innovations (Damanpour, 1991, 1992).

Limitations, Future Research, and Contributions

Like any other studies, this study has its own limitations. One limitation regards the cross-
sectional nature of the data, which makes it hard to infer causality. Future research may
replicate this study using longitudinal data that allow researchers to track over time the
spending behavior of U.S. museums as it relates to communication strategies. Secondly, there
is a concern stemming from the lack of accurate financial information reported in the 990
form. Nonprofit organizations might have a different understanding of reporting expense
measures in their Form 990s, or different motives to underreport overhead expenses that can
cause misleading analysis that, ultimately, results in biases. The use of a subset of large-sized
museums can increase the accuracy of financial reports because these organizations have more
capacity to hire external professional firms to complete their financial statements and Form
990s. More importantly, these museums are put under the watch of more regulated agencies
at the federal and state levels. These practices may limit the generalizability of this study to
smaller museums with net assets of less than 10 million dollars.

Likewise, although the sample size covers a wide range of museums from arts museums,
science museums, history museums, to children’s museums, the emphasis on museums
precludes generalizing this study’s findings to other types of nonprofits. Repeating the study
at a more diversified scale would provide insights into how different nonprofits (e.g., health,
education, social services, etc.) vary in the way they institutionalize their communication
strategies. Also, triangulating the data collection methods by adding a qualitative component
to the study, such as conducting in-depth interviews with nonprofit CEOs or board members,
or observing how nonprofits routinize the institutionalization of their communication
functions (e.g., having an independent department to oversee these activities), would
strengthen the validity of results.

However, these limitations are not meant to undermine the importance of the study and its
contribution to the theory and practice of both the nonprofit and the communication
literature. Theoretically speaking, this study extends institutional theory to nonprofit sector
communication, and attempts to bridge a gap in the literature by examining how nonprofits
institutionalize their communication strategies. In terms of practice, the results of the study
encourage practitioners to increase their organizational ability to “communicate with,

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strategically engage, and respond to their constituents” (Hackler & Saxton, 2007, p. 484) if
their ultimate aim is to promote their organizations and to impact the way through which they
carry out their mission-related goals. This can be achieved by strategically using and investing
in social media communication platforms.

Conclusion

This study uses an institutional theory perspective to examine how nonprofit organizations
institutionalize their communication strategies including social media. Examining nonprofit
museums’ expenditures, this study reached the conclusion that nonprofit museums
institutionalize their social media communication by treating these channels as a specialized
function–namely public relations function–rather than as part of a general management
function.

This study provides empirical evidence that promoting nonprofit communication strategies
that reach out to the public and stakeholders is not a passive phenomenon but, rather, depends
to a large extent on a market-oriented strategy that requires real investment in these
communication channels. The importance of this study lies in the fact that nonprofits today
are operating in an environment characterized by fewer resources, greater demands, and
increased competition for donors, volunteers, and clients (Hackler & Saxton, 2007; Levine &
Zahradnik, 2012). To obtain sustained competitive advantages (Barney, 1991) and to remain
sustainable in our vexing times, nonprofits are called upon to pay more attention to their social
media communication strategies and to better mobilize their communication resources.

Disclosure Statement

The authors declare that there are no conflicts of interest that relate to the research,
authorship, or publication of this article.

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9265-1

Author Biographies

Jiwon Suh is an Assistant Professor of Public Affairs at the University of Texas at Arlington.
Her research interests include organizational behavior, performance and accountability, HR
management, cross-sectoral and cross-national comparison, and communication and
marketing in the public and nonprofit sectors.

Trang Hoang is an Assistant Professor in the School of Public Administration at the


University of Nebraska at Omaha, where she teaches graduate-level courses in public and
nonprofit budgeting, human resources management, and research methods. Her primary
research interests include public pensions, municipal fiscal health, and nonprofit financial
management. She has recently published in Public Administration Review, Journal of Public
Administration Research and Theory, and Social Science Journal.

Imane Hijal-Moghrabi is an Assistant Professor of Public Administration at the University


of Texas Permian Basin (UTPB). Her research interests include change management and
innovation, performance management and budgeting, government ethics, and HR-related
topics. Her work appears in Public Performance & Management Review, Review of Public
Personnel Administration, Public Integrity, Administration & Society, Public Organization
Review, Public Administration Quarterly, and International Journal of Public Sector
Management.

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