A study of incentives in charitable fundraising

Abstract

Purpose The purpose of this study is to determine how self-driven (intrinsic motivators) and monetary incentives (extrinsic motivators) are mediated by an effort to affect fundraising outcomes. This integration sheds light on crowding out between the two types of incentives as well the drivers of fundraising outcomes, specifically effort and donations. Design/methodology/approach A field experiment is conducted over a two-month period, involving an online fundraising campaign with over 300 volunteers assigned to one of five different incentive conditions. A special website was created to monitor fundraiser efforts. Fundraisers filled out pre- and post-study surveys. Findings While high monetary incentives result in the greatest immediate increase in funds raised, they crowd out future intentions to volunteer once incentives are withdrawn. Mediation analyzes show that fundraiser effort fully mediates the effect of intrinsic motivators and partially mediates the direct effect of extrinsic motivators on funds raised. Research limitations/implications A major limitation of field experiments is the lack of control, resulting in higher variation. However, while a more controlled experiment will reduce this variation, this goes at the expense of lower external validity. Practical implications Results indicate that – at least in the short run – monetary incentives can result in higher fundraising outcomes. However, this goes at the expense of a reduction in future volunteering once the incentives are withdrawn. Originality/value This study examines whether extrinsic or intrinsic motivators have a greater impact on funds raised and whether extrinsic motivators crowd out future intentions to volunteer. Different from previous research in which effort is a latent variable, the effort is directly observed over time.