How service encounters predict donor behavior: evidence from a university health systems

Purpose Service encounters between customers and nonprofit organizations may create relationships that lead to monetary donations. Rather than treating all customers as identically likely to donate, though, the type and frequency of past service encounters may yield meaningful insights into who might be most likely to make a gift and to give larger donations. This paper aims to investigate this possibility. Design/methodology/approach Using the context of a large health-care system, the authors combine donation archives with data from patient visits and associated patient satisfaction surveys over a ten-year period to empirically examine whether and what types of patient visits predict donations. Findings Frequency of outpatient visits positively predicts new donor acquisition, the likelihood of repeat gifts among existing donors and the dollar amount of both new and repeat donations. However, the number of inpatient and emergency department visits has a negative to null impact on donation decisions across both studies. Response rate to patient satisfaction surveys also serves as a positive predictor of donor acquisition, retention and conditional donation magnitude. Originality/value Contrary to industry practice of focusing on patients who have experienced dramatic single events with the health-care system (inpatient and emergency visits), these findings provide evidence in favor of a reciprocal relationship between patients and a health-care system that is characterized by a slow-building relationship made of smaller interactions (outpatient visits). The authors find strong evidence that relationships built upon repeated service encounters carry over to the donation domain, suggesting new avenues for how nonprofit organizations may look to promote and capitalize on positive customer relationships.