• No results found

Donor responses on performances regarding efficiency

2 Theory

2.7 Donor responses on performances regarding efficiency

Having analysed giving behaviour, we found that the topic ‘efficiency’ is frequently touched by researchers, while it appears to be a measure for donors of how effective a charity is. From a financial point of view, for instance we might consider how efficiently charities are running their budget for projects, but efficiency upon itself may however, have many meanings for donors.

From a business point of view, budgets are to be regarded as an estimation of how much money or time it takes to complete a project while budgets are part of the larger planning of an organization. Most organizations are limited in their spending and need to make budgets to effectively manage their activities they have planned to do for a period of time.

How do donors respond to this type of performances when we would evaluate budget and real costs of a charity and present it to them as an organizations’ efficiency measure to report? Do positive, neutral or negative budget exceeding have an impact on giving

behaviour? In such research, the response of private donors to the ngo’s critical accountability could be expressed by their willingness in donating to a self-chosen organization they are familiar with.

Based upon our conclusions, we expect the outcomes between incidental donors and frequently donors to be different. Originating from Ajzen’s (1991) theory of planned

behaviour, Smith and McSweeney (2007) found special evidence in the field of charity by the research from Lee, Piliavin and Call (1999) where past behaviour was indicative of

performing the action again, which supports the fact that people who gave earlier to a charity are more likely to repeat their action of giving behaviour.

Anderson and Miller (2003) proved that socially embedded relationship works, not only in having strong bonds in personal relationships but also to have weaker bonds within a related group, which supports the fact that frequent donors seem more likely to be committed to a charity organization as a result of a ‘bond’. It is therefore expected that these donors continue in supporting a charity and thus keep on putting trust into an organizations’

accountability reporting, even if the outcome proves to be negative.

With this research we will add new information to donors which will also impact giving, depending on the organization that is supported which was found by De Wit and Bekkers (2020) who investigated governmental cut downs on KWF, a medical research organization for cancer. Wealthy earlier donors would give more when confronted with the new information that the Dutch government would cut down subsidies on KWF, because these donors value high health standards.

The type of new information we are providing however, being project performances, appeared to be of importance to people with low empathic concern, providing opportunities to convert non-donors into donors. In De Wit and Bekkers’ (2020) research it was also found that people who are already empathic, often referred to as the ‘warm glow’ givers, were lesser responsive to new information.

From their research we expect that regular givers with high incomes might contribute extra funds when we provide them with the opportunity of picking a charity they are already supporting. How much impact this will have on our research may depend on the type of organization they will choose and how much of satisfaction donors derive from the act of giving to the chosen organization.

Similar behaviour from ‘warm glow’ givers was found with an American charity from a direct mail experiment with new information by Karlan and Wood (2017) who added information about the programs impact measured by scientific research about effectiveness.

Large prior donors stemming from ‘effective’ altruism, who value the impact of their donation, gave more when provided with the additional analytical information while earlier small ‘warm glow’ givers supported lesser, which resulted in the same overall donation amount. Karlan and Wood explained this from the fact that a more analytical approach is lost on people who donate from feelings of empathy. This also supports the fact that regular donors are more likely to donate than incidental donors. We earlier concluded that people

givers while people could have many different reasons and/or opportunities to donate to a charity.

We also saw that income is a factor in the Netherlands by research from Bekkers (2003) where higher incomes give more. Thaler (1999) found evidence that within households there is a budget for giving, which could be an explanation for the group that many

researchers refer to as ‘warm glow’ givers. We suspect that this group of givers is limited in their budget of giving and is very willing to support but only decides to donate when budget allows. The group, referred to as ‘warm glow’ givers in literature, could be considered in our research as the group of ‘incidental’ donors.

Former givers who are familiar with an organization, might not need to make extra decisions that non-givers have to do whether or not they are going to donate, except for their budget or take into account their former experiences with an organization. These experiences might involve the satisfaction of a donor’s need regarding project information, project

outcomes and a charities’ reputation like positive or negative news from the media.

Looking at people who do not donate to charities may have many reasons not to do so.

According Nonprofit Tech for Good, an organization sponsored by Funraise.org (2020, p. 30) on a worldwide basis 42 % of non-donors say they are lacking funds, 22% prefers to donate time, 18 % chooses to give goods, 9 % lacks trust while 7% supports friends and family while only 2% feels ngo’s are not contributing to society at all.

One of the reasons of not supporting to charities could be derived from the

behavioural theory in that people may not be custom to donate which originates from their upbringing. Those who did not donate earlier to any organization may have a different point of view and need to be pulled over to change their opinions to take that extra step to donate.

Being transparent about project performances may gain trust and attract donations from people who are sceptic about charities. We also expect that from certain incidental donors, who may already feel some bondage with an ngo, more donations could be elicited by reporting performances.

We have developed the following hypotheses:

H1: Donation requests with extended reporting on the performance of projects have a positive effect on receiving donations from regular private donors

H2: Donation requests with extended reporting on the performance of projects have a negative effect on receiving donations from incidental private donors

H3: Donation requests with extended reporting on the performance of projects have a positive effect on receiving donations from non-givers

To test whether or not if it matters how organizations perform on their projects with regard to costs/hours versus budget, we will test amongst four randomized groups with a different treatment for each group. Each group will only be shown one of the four treatments in order to control for unbiased information.

It is our aim to conduct our research in the Netherlands through the internet research organization Prolific which offers pre-screening on certain groups of respondents.

3 Research and hypothesis