Does Volunteering Crowd Out Donations? Evidence from Online Experiments

Abstract

Problem definition: Conventional wisdom often cautions charities against providing volunteer opportunities to potential donors based on the assumption that volunteering crowds out monetary donations. We challenge this assumption and investigate the causal relationship between an individual’s volunteering activities and their subsequent decisions to donate. Methodology/results: We conducted three consequential experiments where participants engaged in virtual assignments and were subsequently prompted to donate to an existing charity. In the first two experiments, participants were tasked with creating affectionate cards for the homeless, enjoying full autonomy in the design of these cards. In the third experiment, participants colored patterns of varying complexity. Our results indicated that volunteering increased both the propensity and the amount of participants’ donations, pointing to a potential explanation rooted in moral consistency. However, as individuals’ volunteering efforts intensified, their subsequent donations decreased, reflecting a mental budgeting mechanism in these settings. Managerial implications: Our results suggest that (i) volunteer programs not only build up a charity’s labor source but may also increase their donation income; (ii) charities should consider developing virtual volunteering programs that increase their resources by connecting them with more volunteers; and (iii) to maximize donations, charities should carefully design light volunteer tasks.