Raising Money for Charities:
Do People have More Trust for Independent
Charities than Corporate Foundations?
Master thesis
Name: Emona Emilova Pancheva
S3900606
University of Groningen
Supervisor: dr. Marijke Leliveld
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ndSupervisor: dr. Outi Lundahl
2 Raising Money for Charities:
Do People Have More Trust for Independent Charities than Corporate Foundations?
Abstract
The number of charity organizations continues to increase, including those sponsored by corporates. Among the rapidly increasing charities include those focused on environmental conservation efforts. However, the social nature of charity work, their operations rely on donor's trust of the charity organizations. Additionally, for environmental conservation charities, the donors' biospheric values affect their donation intent. However, the effect of the type of charity organization on donor's willingness to donate is unknown. Similarly, the mediating effect of trust and the moderating effect of biospheric values on the relationship between the type of charity and donation intent is not known. The study aimed to investigate the effect of the type of charity organization on willingness to donate and the mediating effect of trust and biospheric values on the relationship. Two types of charity organizations were investigated: the Rainforest Alliance, an Independent charity, and Yves Rocher, a corporate-sponsored charity foundation. A quantitative methodology was used to perform the online experiment and survey involving 178 participants. Half of the participants were given surveys on the independent charity and the other half on the corporate foundation. The findings indicated that people trust independent charities more and are more willing to donate through the same compared to corporate foundations. Biospheric valued did not affect the effect of donating to independent charities despite the trust levels of the donors.
Keywords:
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Content
1. Introduction 4
2. Theoretical framework 7
2.1. Type of nonprofit organization 7 2.2. Willingness to donate 8
2.3. Trust 9
2.4. Biospheric values 12
2.5. The Conceptual Model 15
3. Methodology 16
3.1 Participants and Design 16
3.2. Overall Procedure 17
3.3. Manipulation and Measurement of Variables 17 3.3.1. Type of charity 17 3.3.2. Willingness to donate 19
3.3.3. Trust 19
3.3.4. Biospheric values 20 3.3.5. The effect of trust on the relationship between the type of charity and willingness to
donate 20
3.3.6. The interaction between biospheric values and the relationship between the type of
charity and trust 22
4. Results 23
4.1. Willingness to donate according to the type of charitable organization 23 4.2. The relationship between trust, type of charity, and willingness to donate according to the type of the charitable organization 24
4.3. The mediating effect of trust on the relationship between Type of Charity and
Willingness to Donate 24
4.4. The Moderated Mediated Effect 26
5. Discussion 28
References 31
4 1. Introduction
The past decades have witnessed rapid economic growth through increasing consumers' consumption worldwide (Chen and Chai, 2010). This has caused and continues to cause environmental deterioration through over-consumption and utilization of natural resources (Chen and Chai, 2010). The consequences of environmental degradation are global warming, depletion of the stratospheric ozone layer, pollution of sea and rivers, noise and light pollution, acid rain, and desertification (Ramlogan, 1997). As Chen and Chai (2002) state, the environmental worsening has become a persistent public concern in developed countries, which has awakened the developing countries to the green movement for the preservation of the environment. In this sense, the existence of charitable organizations contributing towards environmental conservation is vital for the support of one sustainable Earth and the possible prevention of more harm.
Since their introduction in the United States in the late 1700s, non-profit organizations have provided many critical services (e.g., education, arts, social services; Hawks, 1997). In terms of the number of money charities receive, they occupy an important place in Western societies (Giving USA Foundation, 2006; Wainwright, 2003; CBF, 2006). As such, in 2019, the largest source of charitable giving came from individuals at $309.66 billion, or 69% of the total giving (Giving USA 2020). However, charitable giving and perceptions about giving vary across the world (Andreoni and Payne, 2013). In addition, there is no single measure that fully captures generosity or giving (Andreoni and Payne, 2013).
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One major challenge for the charities is the fact that despite the large amount of charitable giving, there are signs that donors are not happy with the performance realized by charities (Van Iwaarden et al., 2009). This is partly due to the nature of the charitable organizations. As most charities are non-profit organizations and do not offer tangible products for sale but rather offer intangible services and ideals, reliability and integrity play a central role when current, and potential donors evaluate non-profit organizations (Venable et al., 2005). According to Venable et al. (2005), this is not only because of the intangibility of the proposed services but also due to the social nature of exchange in the donor-nonprofit relationship. In this type of relationship, the social nature of exchange implies trust as a key factor when people are deciding to donate or not.
In marketing, trust has been defined as “a willingness to rely on an exchange partner in whom one has confidence” (Moorman, Deshpandr, and Zaltman, 1993). Morgan and Hunt (1994) built on this definition and conceptualized trust as “existing when one party has confidence in an exchange partner's reliability and integrity.” In addition, the trust towards the charitable organization plays a key role due to the fact that non-profits are primarily services, and consequently, the organization offering the service becomes the focal point for consumers (Berry, 2000). With services, the company [not the product] is the primary brand, and brand development is crucial in services, given the inherent difficulty in differentiating products that lack physical differences and the intense competition within service markets (Berry, 2000). Thus, because of the vast number of non-profit organizations - only in the USA there are more than 1,54 million charitable organizations, and the increased competition for donations, it follows that the development of a strong non-profit brand occurs at the organizational level and may provide a distinct competitive advantage (Berry, 2000). One such brand is Greenpeace. Greenpeace's use of the media has always been distinctive and successful (Eden, 2004). Thanks to its direct actions, passionate idealism, bold campaigns, and the successful maintenance of corporate integrity, Greenpeace has turned into one of the most visible environmental organizations in the world, raising environmental issues to public knowledge and influencing both the private and the public sector.
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already abundant charitable literature in the field of for-profit companies and non-profit organizations and the comparison between them. The focus of the current study is the role played by the trust on the preference and willingness to donate through independently founded charities or corporate founded charities, which has not been studied.
7 2. Theoretical framework
2.1. Type of non-profit organization
In this study, two types of non-profit organizations will be analyzed – corporate foundations and independent charities (for example, WWF, UNICEF, ALSAC, etc.). For the remainder of this thesis, the terms charity, non-profit, and not-for-profit will be used interchangeably. In general, there is no consensual or legal definition for corporate foundations that can be applied internationally (Rey-Garcia et al., 2012). A company-sponsored private foundation is a separate legal entity that is exempt from paying federal income tax (Petrovits, 2006). Although legally independent, these foundations maintain close ties with their parent companies (Petrovits, 2006).
Companies are increasingly choosing to establish corporate foundations to accomplish philanthropic objectives because of this vehicle's distinct advantages: increased brand recognition, customer loyalty, community goodwill, differentiation from competitors, and improved employee morale (Haskell, 2013). However, the economic objectives are also playing a role when corporate foundations enable consistent levels of giving in years by building up reserves when company profits are high (Haskell, 2013). Companies typically take charitable deductions when they make gifts to their own foundations (Haskell, 2013). Moreover, corporate foundations can engage in charitable activities that may not be tax-deductible as charitable donations if handled directly by the company (Haskell, 2013).
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As Andreoni and Payne show in their study (2013), there is more to understanding how tax policies affect giving than simply trying to measure a price elasticity for giving. Across countries, there are a variety of schemes in place to provide individuals incentives to donate (Andreoni and Payne, 2013). In some countries (e.g., Denmark, Finland, Germany, Italy, Switzerland), some or all individuals are obligated to donate as the laws require a fixed percentage of individual taxes to be allocated to churches or other charities (Andreoni and Payne, 2013). With respect to voluntary donations, some countries provide direct incentives to all taxpayers (e.g., the US, Canada, the UK, Germany, Australia, India, Indonesia), others only to those with high incomes or high levels of donations, some strictly limit how much one can offset tax liability with her donation (e.g., Argentina [limited to 5% of taxable base], China [up to 30% of taxable income], Czech Republic [limit of 10% of income if at least 2% is donated], France [limit of 20% of taxable income], Russia [limit of 25% of taxable income], South Africa [limit of 10% of taxable income]), and others provide no incentives (e.g., Afghanistan, Brazil, Croatia, Israel [incentives are given only for donations to public institutions]) (Andreoni and Payne, 2013).
In recent decades, many of the changes in tax policies related to charitable giving provide greater incentives for wealthier individuals to donate (Andreoni and Payne, 2013). The reason for this is that the donor is allowed to take a charitable deduction against taxable earned income for the fair market value and not incur any capital gains on the difference between the fair market value and the basis of the securities or property (Andreoni and Payne, 2013). These changes may help to explain the growth in donations to foundations and faster growth in giving by individuals in higher income tax brackets (Andreoni and Payne, 2013).
2.2. Willingness to donate
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to be compelled to give through them before considering the above-listed factors. Some donors may be attracted by the organizations' recognition and emphasis on how the donations will be used if they do not have prior experience (Andorfer & Otte, 2013).
In this study, preference for corporate versus independent charity organizations when individuals are choosing a platform to give will be examined. Haskell (2013) established a preference for both corporate foundations and independent organizations depending on the donor traits. The agency theory holds that the non-profit form solves a problem of asymmetric information that arises when donors cannot adequately evaluate the quality of charitable services they would like to purchase (Malani and Posner,2007). The relationship between charity organization type and willingness to donate will be examined by the hypothesis:
Hypothesis 1: People prefer to donate through independent charity organizations.
2.3. Trust
In economic and legal theory, the existence of non-profits next to public agencies and for-profit corporations is assumed to be based on the greater trustworthiness of non-profits due to the non-distribution constraint: Non-profits are not allowed to distribute profit to private parties (Hansmann, 1980, 1987, 1996; Rose-Ackerman, 1996). According to this theory, non-profits should be most active in situations of asymmetric information: When it is hard to get reliable information on the quality of the services provided, the non-profit character of the service provider signals trustworthiness to the donor (Bekkers, 2003).
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on accountability-constrains rational decision making on donations (Bekkers, 2003). Consequently, donors do not favor non-profits with a lower level of expropriation of funds as would be expected by a rational actor perspective (Klick, 2000).
Trust in charities can be increased further by giving more information on actual cost-income ratios because the public is willing to accept fundraising costs that are even higher than the actual costs (Bekkers, 2003). Bekker's research (2003) was also shown that those who have a more accurate picture of fundraising costs have more trust in charities and support a higher number of causes. However, charitable organizations have only limited control over the public's trust because it is also rooted in general social trust in institutions and fellow citizens (Bekkers, 2003).
From a fundraising perspective, there would appear to be a group of factors, including a personal link to the cause and the extent to which a donor shares the beliefs of an organization that may predispose donors to the commitment from the outset of a relationship (Sargeant and Woodliffe, 2007). Equally, individuals who identify with the goals that an organization is striving to achieve and the manner in which it is seeking to achieve them are significantly more likely to experience commitment (Sargeant and Woodliffe, 2007). It may be difficult for a non-profit to manipulate these factors post hoc to develop commitment, but a knowledge of the motive for initial support might assist non-profits in identifying individuals likely to have a greater commitment to the organization (Sargeant and Woodliffe, 2007). As Sargeant and Woodliffe (2007) have established, this is a significant issue because, if properly developed, such individuals can form the core of a loyal supporter base and therefore contribute significantly higher lifetime values.
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a genuine loss to the beneficiary group if they withdraw their support may increase (Sargeant and Woodliffe, 2007).
The findings by Sargeant and Woodliffe (2007) indicated that donors begin their appraisal of a brand from the starting point of hearing about it, and will check whether the advertised brand values match theirs, and consequently will believe unless they find a reason not to. As a result, donors will have a clear conception of what it means to be a charity and how they would expect such organizations to behave. Consequently, this has profound implications for non-profit brand management because brand conceptualization appeared to develop in a very different way from that observed in the commercial sector (Sargeant and Woodliffe, 2007). In the non-profit context, there would appear to be a series of traits that are not built directly through an organization's own fundraising or marketing communications.
In the current study, two organizations: an independent charity organization and a corporate foundation, will be pitted together, and the perceived donors' trust of each will be measured. Although being a corporate foundation does not distinguish the Yves Rocher Foundation from being a charity, as is the Rainforest Alliance, the donor perceived characteristics of the two may vary. The study will seek to establish if Yves Rocher being a well-known brand may affect an individual's preference to donate through the foundation. The findings establish if donors trust Yves Rocher Foundation more or less because it is a corporate foundation compared to the less known Rainforest Alliance an independent charity. The effect of the type of charity organization on trust was measured using the hypothesis:
Hypothesis 2: Independent charities will be trusted more than corporate foundations.
With the recognition of trust as the basis through which charity law is grounded, its impact on the preference for either corporate or independent charities is unknown (Herzlinger, 1996; Mullin, 1995). The role of trust in donor, charity, and beneficiary relationships has been documented (Saregeant & Lee, 2002). The mediating effect of trust on the relationship between charity preference and willingness to donate will be investigated by the two hypotheses:
Hypothesis 3: Higher level of trust will lead to a higher willingness to donate.
Hypothesis 4: Trust mediates the effect of the type of charity on willingness to donate.
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they believe that the charity can conduct their charitable mission, are honest in the use of their donations, and prioritize beneficiaries' rights. Individuals' trust in the charity affects both their intention to donate and future monetary donation behavior (Alhidari et al., 2018).
2.4. Biospheric values
The influence of human values on their pro-social intent and behavior has been investigated for a long time. Research on individual values indicates a relationship with environmental concern, which is related to green buying intentions and donations towards environmental charities (Schultz et al., 2005; Steg et al., 2005; De Groot and Steg, 2007). Individual values have been theorized to be the guiding principles in people's lives, which form the person's orientation (De Groot & Steg, 2007). In his theory of basic values, Schwartz (2012) classified human values as ten motivational structures varying along two dimensions: Openness to change vs. conservatism and self-transcendence vs. self-advancement.
Research examining how values relate to environmental concern, behavior, and pro-social intent towards environmental causes focused on the dimension of self-transcendence versus self-enhancement (Hedlund, 2011; Schultz et al., 2005). Self-transcendence values contradict those related to self-advancement; the dimension examines the conflict between values, emphasizing welfare, and interests for self-versus others (Schartz, 2012). Universalism and benevolence are among the ten values listed in the theory of basic values in self-transcendence orientation. Universalism focused values include protection for the welfare of nature and all people, while benevolence values related to preserving and enhancing the welfare of the individual's close contacts (Schwartz, 2012).
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Schwartz's (2012) revised model, biospheric values were added under universalism. De Groot and Steg (2008) differentiate biospheric and universalism values as the variance between where each is grounded: society versus nature.
Biospheric values have been found to have significant positive associations with pro-environmental behaviors (De Groot and Steg, 2007, 2008; Katz-Gerro, 2017). While research has separated biospheric values from universalism (De Groot & Steg, 2007; Steg et al., 2005), its influence on social behavior has not been established. The influence of values on pro-social behavior has been evaluated for the last two decades. Values relate to an individual's personality and capture the motivation behind specific actions (De Groot & Steg, 2007; Steg et al., 2005). Analyzing the effect of biospheric values on pro-social intent captures the deep motivational basis for the individual regarding their views on nature and the environment. Additionally, values are considered to be relatively stable because they are formed at the early life and educational experiences (Katz-Gerro, 2017).
In a study to establish how biospheric, altruistic, and egoistic values influence consumers' decision to purchase organic wine, Rahma and Reynolds (2017) developed a conceptual framework for understanding the relationship. The authors capitalized on Schwartz's (1992) theory or basic values to analyze the role played by values informing decisions regarding organic wine purchase for more money than non-organic wine, which is a pro-social intent. The influence of biospheric values was significant in three types of behavioral intentions: purchase intent, willingness to sacrifice quality, and willingness to pay more (Rahman & Reynolds, 2017). Despite previous research, which has been heavily dependent on the altruistic and egocentric values theorized by Schwartz, the two values did not have strong influences on the behavioral outcomes as did the biospheric values. The conflict between consumers' focus on egocentric versus altruistic values was neutralized by the introduction of intrinsic attributes of the wine.
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the egocentric self-development values presented by Schwartz. The study found similar effects of the biospheric values on the pro-environmental behavior for the four countries. The differences between the influence of biospheric and the other three values was also similar for the four countries. Overall, biospheric values were recognized as the most important influencers of pro-environmental behavior. Combined, biospheric, benevolence, and universalism are key values for pro-environmental behavior, but their effect is significantly different (Katz-Gerro, 2017). Further exploration of how biospheric values influence social intent regarding pro-environmental decisions is recommended.
Various studies have linked biospheric values with behaviors that promote environmental sustainability. Possessing high levels of biospheric values fosters environmentally friendly behavior, including preferences and intentions for conserving the environment (Rahman & Reynolds, 2017). Van der Werff et al. (2013) associated biospheric values with various factors related to pro-social environmental behaviors and intentions, such as self-identity and preferences for environmental foundations.
As De Groot and Steg have found (2010), individuals with strong biospheric values are more likely to be intrinsically motivated to engage in pro-environmental behavior (i.e., they aim to benefit the environment), while the opposite was true for those with strong egoistic values, who were more likely to engage in pro-environmental behavior because of extrinsic factors. Likewise, people high in environmental concern seem to focus on environmental consequences, whereas those low in environmental concern especially seem to consider personal outcomes when making choices (Loukopoulos, Jakobsson, Gärling, Schneider, & Fujii, 2004).
In addition, laboratory and field studies showed that people derive more pleasure and satisfaction from acting pro environmentally and are more likely to comply with environmental appeals when pro-environmental behavior is advertised as 'morally good' rather than 'economical' (Steg, Bolderdijk, Keizer, and Perlaviciute, 2014). Specifically, researchers found that people anticipated feeling better about complying with a normative (i.e., Do you care about the environment? Take a coupon for a free professional tyre check!) instead of a gain appeal (i.e., Do you care about your finances? Take a coupon for a free professional tyre check!), and, importantly, were also more likely to comply with a normative appeal than again appeal (Bolderdijk, Lehman, et al., 2012; Bolderdijk, Steg, et al., 2012).
15 Hypothesis 5: People with lower levels of biospheric values will have higher levels of trust for
independent charities.
Hypothesis 5 tests the effect of biospheric values on the relationship between trust and type of charity. The hypothesis implies that the effect of the relationship between the type of charity and trust is stronger when the individual has lower biospheric value levels. This indicates that individuals with higher biospheric values do not have a preference for either independent or corporate charity and are willing to donate to either as long as they are focused on environmental conservation.
2.5. The Conceptual Model
The independent relationships between charity preference, trust, biospheric values, and pro-social intent vary. However, the combined relationship between the three variables is unknown. The proposed study will evaluate the relationship between the type of non-profit organization and willingness to donate, the impact of trust on willingness to donate. The influence of biospheric values on the relationship between the type of non-profit organization and trust will also be assessed (see Figure 1).
16 3. Methodology
3.1. Participants and Design
The study aimed to infer the existing relationship between the type of charity and willingness to donate. The quantitative study involved conducting an online experiment and data collection using a structured questionnaire. Structured questionnaires are best suited for quantitative studies because of their fixed response nature and ease of attaining consistency (Malhotra, 2009). I used a 2-cell (charity type: independent vs. corporate founded) between-subjects design where participants were randomly assigned to one of these two conditions. Biospheric values were the continuous moderator.
The participants were recruited through a convenience sample from social media platforms such as Facebook, Instagram, WhatsApp, Twitter in order to have diversification in the nationalities and the age groups. Using convenience sampling, as many potential participants as possible were contacted and recruited as participants. The survey was sent, explaining the objective of the study, asking those willing to participate in completing the survey. A response rate of n = 261 was achieved.
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Figure 2. A pie chart representing the top countries represented in the study sample.
3.2. Overall Procedure
Potential participants were approached for recruitment through Qualtics. In the first question, the participants were informed of the objective of the study, the benefits and possible harms, and asked to tick on the "agree" box if they were providing consent to participate. In the second stage, the participants were provided with questions and information for either Yves Rocher Foundation or the Rainforest Alliance. The participants were randomly distributed into either an independently founded charity or corporate founded charity group. A brief description of each charity type was provided to the participants in the group as an introduction. The information was provided in the form of a logo and a paragraph introducing the charity to the participants. The charity specific questions included preference, trust, and willingness to donate through the specific charity. The participants responded to six questions on trust for the specific charity, two on willingness to donate, their overall impression, and prior awareness or involvement in the specific charities. The participants then proceeded to the next section, where they responded to demographic questions and others assessing their biospheric values and overall trust in charities.
3.3. Manipulation and Measurement of Variables 3.3.1. Type of charity
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Yves Rocher Foundation has more than 28 years of experience in the fight for the conservation of biodiversity. The charity has more than 450 recognized women around the world. In 2020 the foundation reached its goal of 100mln trees planted as in this initiative are involved 35 countries leading to the opportunity a tree to be planted every 3 seconds. This initiative was started 13 years ago by the foundation due to the need for the fight against deforestation: over the past 30 years, around 420 million hectares of forests have been lost around the world, which represents a football pitch every second. The next objective of the foundation is 135 million planted trees by 2025. The program for plant a tree for the planet is one of the main pillars of the Yves Rocher Foundation due to the main mission of the foundation: Committed to biodiversity. As Jacques Rocher says: trees are the pillars of our land. They fight climate change, prevent desertification, protect biodiversity, provide countless ecological benefits, contribute to economic development and preserve the future of our populations.
Rainforest Alliance has more than 33 years of experience in the fight for the conservation of biodiversity. The charity is working in more than 70 countries at the intersection of business agriculture and forests. Rainforest Alliance has certified more than 2 million farmers who are following the sustainable standards of the charity to improve the environment. More than 5 million hectares of farmland are certified against Rainforest Alliance sustainability standards. Being involved in more than 100 projects allows the charity to bring direct benefits to farmers, forest communities, and nature. The main mission of Rainforest Alliance is to build an alliance to create a better future for people and nature by making responsible business the new normal. One of the recognized strengths of Rainforest Alliance is its certification programs, which have four pillars: forests, climate, human rights, and livelihoods. All this can be recognized by their seal which is promoting collective action for people and nature. In fact, the seal of Rainforest Alliance has a special meaning - Frogs are what scientists call bioindicators-meaning that a healthy population of frogs indicates a healthy environment (the reverse is also true). The Rainforest Alliance has chosen the red-eyed tree frog as its mascot more than thirty years ago, as this bright-eyed amphibian is commonly found in the neotropics, where the founders first started working to protect tropical rainforests. Since then, the frog seal has become an international symbol of sustainability.
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Figure 3. Similarities between Yves Rocher Foundation and Rainforest Alliance
3.3.2. Willingness to donate
Participants in each group were asked if they were willing to donate through the specific charity then or in the future. The test for reliability of the two questions measuring donation intent indicated that they were reliable with a Chronbach's Alpha (α = 0.93), greater than the recommended 0.7 as seen in Appendix B.
3.3.3.Ttrust
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measured for general charities. To obtain a score for the participants' perceived trust on either the specific charity, the average score for each category per individual was calculated. Reliability scores indicated that the questions assessing the participant's trust in their respective charities were reliable based on Cronbach's α = 0.94, which is larger than the expected 0.7 (see Appendix B). The general trust scores were also reliable based on a Cronbach's α = 0.84.
3.3.4. Biospheric values
The participants' biospheric values were measured using the four items biospheric value scale used by Van der Werff et al. (2013). Participants rated the importance of each value as a guiding principle in their life on a scale from 1 (as opposed to my values) to 7 (extremely important). The scale assesses participants' rate of the four biospheric values, namely, respecting the Earth: harmony with other species; Unity with nature: fitting into nature; Protecting the environment: preserving nature; and Preventing pollution: protecting natural resources (De Groot & Steg, 2007). Van der Werff et al. (2013) measured and established the validity and reliability of the biospheric values with an internal consistency of 0.87 (M= 4.73, SD =1.32), which is close to that obtained for this study (Cronbach's α = 0.851). The biospheric values scores were obtained by summing the numbers marked in the responses to obtain the total value. Participants who scored less than 14 were classified to have low biospheric values; those between 14 and 28 had high values.
3.3.5. The effect of trust on the relationship between the type of charity and willingness to donate
The mediating effect of trust on the relationship between the type of charity and willingness to donate was evaluated using regression analysis. In this case, willingness to donate was the dependent variable, while the type of charity and the effect of trust on the direct relationship between the primary relationship were the predictor variables. Using Hayes index for a process model, the indirect effect of X on Y = a*b, a regression analysis was conducted to identify the coefficients of a and b (Figure 4). Trust in the different types of charities was also used for the analysis. The direct effect of type of charity on willingness to donate is represented by c'.
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process, allowing the researcher to investigate by what means X exerts its effect on Y. In our case, X or the independent variable was the type of charity being either an independent or a corporate founded charity. Our Y or dependent variable was the willingness to donate or donation/pro-social intent. A simple mediation process links X to Y through a single mediator (M), although more can be included in complex process models (Hayes, 2015).
A simple moderated relationship occurs when the strength of the relationship between two variables is dependent on a third variable (W), in our case, biospheric values. In a simple moderated process model, the moderator (W) interacts with X to depict Y. In a moderated mediation like in our case, the interaction between X and W on Y is first evaluated before exploring that of the mediator on the effect (Preacher, 2007). In our case, the interaction between the type of charity and biospheric value and how it affects willingness to donate is evaluated first. The mediating effect of trust on the effect of the interaction between type of charity and biospheric values on willingness to donate is then evaluated as the second step of the process. Moderated mediation models attempt to explain both how and when a given effect occurs and is best explored when the strength of an indirect effect depends on the level of some variable, or in other words when mediation relations are contingent on the level of a moderator. In our case, biospheric values moderate the indirect relationship between the type of charity and willingness to donate through trust hence the emphasis on Hayes' Model 7.
Moderating indirect effects implies that the mediated effect is conditional hence the conditional name process for moderated mediation models (Preacher, 2007).
Figure 4. The Hayes Model 7 index
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3.3.6. The interaction between biospheric values and the relationship between the type of charity and trust
The moderating effect of biospheric values on the indirect relationship between the type of charity and willingness to donate was evaluated using the conditional process model index by Hayes (2015). Following the Hayes model, the addition of the blue shape in the process model represents the moderated mediation model. A two-step process analysis was conducted, with the first step being the simple mediation index for the previous hypothesis.
23 4. Results
4.1. Willingness to donate according to the type of charitable organization
An ANOVA was conducted to determine if there exists a difference between the participants' willingness to donate for both types of charities: the Rainforest Alliance and the Yves Rocher Foundation. The type of charity was the independent variable. The ANOVA results indicated that a difference existed in the participants' willingness to donate for the Rainforest Alliance and the Yves Rocher groups (F (1,177) = 5.863, p = 0.016). The donation intent was higher for the Rainforest Alliance (M = 3.47, SD = 1.58) than the Yves Rocher Foundation (M = 2.95, SD = 1.61). The difference is presented in Figure 5.
Figure 5. A comparison of donation intent between Rainforest Alliance and Yves Rocher
Foundation
From the histogram, many of the participants who were likely to donate belonged to the Rainforest Alliance, while the opposite is true for the Yves Rocher Foundation. For both groups, many participants were neither willing nor not willing to donate. Most of the participants who were unlikely to donate belonged to the Yves Rocher Foundation.
Rainforest Alliance
M=3.47, SD=1.58
Yves Rocher
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The results indicate a difference in the willingness to donate to independent and corporate charities in response to Hypothesis 1; hence the null hypothesis is rejected.
4.2. The relationship between trust, type of charity, and willingness to donate according to the type of the charitable organization
An ANOVA was conducted to determine if there exists a difference between the participants' level of trust for the Rainforest Alliance and the Yves Rocher Foundation. The trust levels were higher for the Rainforest Alliance (M = 6.83, SD = 1.76) than the Yves Rocher Foundation (M = 6.17, SD = 1.58). The results indicated a statistically significant difference in the participant's level of trust for the Rainforest Alliance and the Yves Rocher Foundation (F (1,177) = 5.19, p = 0.024).
The trust levels for independent (Rainforest Alliance) and corporate charity (Yves Rocher Foundation) varied significantly. The analysis results were used to prove the second hypothesis.
Pearson's correlation test was conducted to measure the strength and direction of the association between donation intent and trust levels. A significant correlation was established (r = 0.474, p<0.01) between donation intent and the overall trust levels for each charity group (Appendix D). The findings indicate that individuals' perceived trust in a charity organization is associated with their willingness to donate. As the results do not indicate causality, an association relationship is established between perceived trust and willingness to donate. The null hypothesis testing the effect of trust on the willingness to donate was, therefore, rejected. This indicates that there exists a positive relationship between trust and willingness to donate. The higher the trust an individual has in charity, the more they are likely to donate.
Repeating the analysis using general trust towards charities as a covariate yielded a similar association relationship. The general trust levels were also positively correlated with willingness to donate (r = 0.331, p < 0.01). From the findings, both general trust and the average trust scores for the individual charity types correlate with willingness to donate.
4.3. The mediating effect of trust on the relationship between Type of Charity and Willingness to Donate
A regression analysis was conducted using the Hayes simple process Model 7 index Y = a*b. Using the model represented in Figure 4, the coefficients for a, b, and c' were calculated using the regression model,
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Where Y, X, and M are willing to donate, type of charity, and trust, respectively.
This analysis was conducted to test Hypothesis 4, which is the mediation effect of perceived trust on the relationship between the type of charity and the willingness to donate. In this case, I was measuring the indirect effect of type of charity on willingness to donate through trust using the simple process model by Hayes (2015).
The perceived trust for either independent or corporate charity foundations was established to have a significant effect (p < 0.001) on donation intent and fits in the model. However, the model had a low R square value (0.235), indicating a low predictive value of the regression model. Using the regression model, only 24% of the donation intent can be explained by the level of trust for charities.
Figure 6. The Hayes Model 7 index
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The coefficient of the indirect effect of type of charity on willingness to donate through trust is calculated as 0.169* 0.457, which is 0.077. Hypothesis 4 implied that the perceived trust of a specific type of charity affected the willingness to donate. The null hypothesis would, thus, imply that trust does not affect the relationship between the type of charity and willingness to donate; hence (a*b = 0). Given the results, that a*b = 0.077, I reject the null hypothesis and conclude that trust positively affects the likelihood that an individual will donate to an independent charity. Trust, therefore, influences the relationship between willingness to donate and charity type.
To eliminate multicollinearity, the perceived trust in the types of charities was correlated with general trust in charity organizations. A correlation coefficient of r = 0.47 was obtained as indicated in Appendix D, in addition to more of the correlation results. The r-value is not a perfect correlation; therefore, multicollinearity was ruled out. The general trust in charities did not affect (p = 0.063) the willingness to donate to a specific charity and did not fit in the model. Based on the correlation results, general trust in charities does not affect individuals' trust in either independent or corporate foundations. Therefore, the effect of an individuals' perceived trust on the type of charity is not influenced by their general trust in charities.
4.4. The Moderated Mediated Effect
From correlating the biospheric value score for each participant and their trust levels for the different charity types, the results did not indicate a statistically significant relationship (r = 0.073, p = 0.332) as indicated in Appendix D. From this analysis; it can be concluded that biospheric values do not affect an individual's trust in charities. Consequently, I continue with the conditional effect analysis.
Biospheric values moderated the mediation effect of trust on the relationship between the type of charity and willingness to donate (Model 7). A two-step process analysis was used to prove the hypothesis. The first process was to test the mediating effect of trust on the relationship between the type of charity and willingness to donate, which was achieved in testing for hypothesis 4. The second process was to test the moderating effect of biospheric values on trust in the type of charities. Hayes (2015) listed the index of the moderated mediation process as a3bW, which quantifies the effect of W on the indirect effect of X on Y through M.
In our case, W is biospheric values.
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28 5. Discussion
In a world where millions of charities exist, corporate foundations are constantly fighting for the attention of and support of the public. Todays' society benefits significantly from charities and charitable organizations in ways that governments or businesses cannot meet. As a result, businesses tend to engage in charitable initiatives not necessarily for CSR but also in attempts to meet some of society's needs. Corporate foundations such as Yves Rocher may engage in charitable activities that help address some of the current challenges facing today's society. Initiatives such as environmental protection may not necessarily be related to the focus of the corporate, but that does not disqualify business organizations from engaging in charitable activities towards such causes.
When faced with two different types of charities engaged in similar activities, specific factors affect people's choices on what organization to donate to. In the charitable literature, how new donors are attracted and how the old ones to be kept and turned into loyal supporters are constantly researched. Trust in the charity organization has long been viewed as a determining factor to people's intent to donate through the specific charity. This is the reason why this research explored the donors more in-depth and, in particular, their trust. Previous literature has also identified biospheric values as a determining factor in an individual's intent to donate to an environmental conservation charity. The research focused on establishing the relationships between the type of charity organization, perceived trust in the charity organization, individual biospheric values, and donation intent. The direct and indirect effects of perceived trust in a charity organization and the individuals' biospheric values on willingness to donate were evaluated.
The findings indicated that the type of charity affects people's willingness to donate when given between independent and corporate foundations. Conclusions were drawn that individuals' are more willing to donate through independent charities than corporate foundations. Additionally, trust was found to be a mediator between the type of organization and the donation intent, indicating that people prefer to donate via independent charities because they trust them more.
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Alliance or Yves Rocher Foundation, the charities used in the study. Therefore, the preference for the Rainforest Alliance was not based on existing connections.
The participant's preference for independent charities further disproves Andorfer and Otte (2013) theory that donors give to organizations with similar ideals, missions, or values because both of the selected organizations supported similar causes. The findings, however, support the theory by Haskel (2013) that when presented with corporate and independent charity organizations, individuals are more likely to pick the latter, while companies will pick the former. The findings build on the agency theory application to non-profits proposed by Haskell (2013) that donors will choose non-profits if they cannot adequately evaluate charitable services or lack enough information to choose between types of charitable organizations.
Previous studies have not entirely connected trust, and donation intent without symmetrical information despite establishing that charity organization have the advantage of inbuilt trust among individuals unless proven otherwise. According to Alhidari et al. (2018), donors' trust in charities that they will use their donations as promised affects their donation intent and future donation behavior. Therefore, previous research connects trust and donation intent based on the charity's projected information/activities. The current study expanded the theory by supporting the relationship between trust and donation intent even in cases where enough information is not provided, or the charity's actions are not known.
The previous connection between donation intent and trust exposed the gaps in existing research on the relationship between the two based purely on the individual's instincts. In this case, the participants did not have prior information about any of the two charities, donor funds utilization, and ratings in terms of environmental conservation or donor fund utilization. However, the findings still supported existing theories on the connection between preference and trust for independent charities than corporate founded.
The established effect of trust on the relationship between charity type and donation intent further supports those theories by offering a possible explanation. The existing trait of individuals' preferring non-profits over corporate founded charities is reflected in their trust for the same, hence their willingness to donate. Trust over non-profits occurs naturally to individuals unless they are provided with a reason not to, through the information of donor fund mismanagement, among others. As a result, individuals will choose to donate through the organizations they trust more, hence the effect of trust on willingness to donate to independent charities.
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biospheric values did not seem to affect the individuals' trust in independent or corporate-sponsored charities or their willingness to donate based on that trust. Having high scores of biospheric values is an indicator that the individual is inclined towards environmental friendliness. Therefore, they would probably be willing to donate to any charity organization related to environmental conservation. The two charities presented in the research were focused on environmental conservation, which would have attracted any individual with high biospheric values. Research by De Groot and Steg (2007) and Schultz et al. (2005), among others, indicate that biospheric values represent the individual's level of environmental concern and relationship with nature and the environment. However, the levels of biospheric value scores did not seem to affect the effect of trust on donation intent. Therefore, as long as people have high biospheric value levels, their willingness to donate to an environmental conservation cause is not affected by their trust with the charity organization they are using to donate. For the individuals with high biospheric values, the difference between the Rainforest Alliance and Yves Rocher does not exist, and to them, any charity organization focused on environmental conservation is worth their donation.
Limitations and future research
The study established that individuals are more inclined towards independent charities than corporate founded charities. Further studies are recommended to understand the in-depth reasons for the preference of independent to corporate founded charities. A qualitative study is recommended to facilitate an in-depth understanding of people's opinions and beliefs on the differences between independent and corporate founded charities.
31
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Appendix A
SurveyInformed Consent:
The purpose of this investigation is to get more insights on donation decision-making. The participation in this study is voluntary.
The survey is divided in 2 parts. In the 1st part you will read about a charity and answer some
questions about that charity. In the 2nd part you will answer some general questions about yourself.
The research will take around 6 minutes.
If you are 18 years of age or older and agree to participate in the survey please check the 'I AGREE' box and press next at the bottom of the page.
I AGREE
I DISAGREE (if they choose this option the participants will be directed to the end of the survey)
===== page break =====
For the participant who will see only Rainforest Alliance.
In the next lines you will get familiar with Rainforest Alliance. Please read the information carefully as in the next questions you will need to answer questions for it.
Rainforest Alliance
Rainforest Alliance is an independently founded charity. Independently founded charities are non-profit organizations which are founded entirely independently from any company
influences.
INDEPENDENLY FOUNDED CHARITY
Rainforest Alliance has more than 25 years experience in the fight for the biodiversity protection and enrichment by providing support and financial aid for local, alternative and effective initiatives across the globe.
The charity also supports women's rights, and helps them mitigate and adapt to the climate crisis.
The mission of Rainforest Alliance is to commit for a better world where people and nature thrive in harmony.
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Please answer the following questions about Rainforest Alliance. (Dodds (2014)
1. How much trust and confidence do you have in Rainforest Alliance?
0 (Don't trust Rainforest Alliance at all) 10 (trust Rainforest Alliance completely)
2. How much trust do you have for Rainforest Alliance, to make a positive difference to the cause they are working for?
0 (Don't trust Rainforest Alliance at all) 10 (trust Rainforest Alliance completely)
3. How much trust do you have for Rainforest Alliance, to ensure its fundraisers are honest and ethical?
0 (Don't trust Rainforest Alliance at all) 10 (trust Rainforest Alliance completely)
4. How much trust do you have in Rainforest Alliance, to make independent decisions, to further the cause they work for?
0 (Don't trust Rainforest Alliance at all) 10 (trust Rainforest Alliance completely)
5. How much trust do you have for Rainforest Alliance, to be well managed?
0 (Don't trust Rainforest Alliance at all) 10 (trust Rainforest Alliance completely)
6. How much trust do you have in Rainforest Alliance, to ensure that a reasonable proportion of donations make it to the end?
0 (Don't trust Rainforest Alliance at all) 10 (trust Rainforest Alliance completely)
===== page break =====
Please indicate how likely it is you would donate to Rainforest Alliance
Questions Very unlikely (1) to Very likely (7)
7. I intend to donate to Rainforest Alliance 8. I am planning to donate to Rainforest Alliance
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Please check the circle that best represents your overall impression of Rainforest Alliance. Negative O O O O O O O Positive
Unfavorable O O O O O O O Favorable Bad O O O O O O O Good
Dislike O O O O O O O Like
===== page break =====
9. To what extent did you already know Rainforest Alliance?
Not at all O O O O O O O Very much
10. To what extent you have supported Rainforest Alliance in the past year?
Not at all O O O O O O O Very much
11. Please choose the last circle – Very much (attention check)
Not at all O O O O O O O Very much
===== page break =====
For the participant who will see only Yves Rocher Foundation.
In the next lines you will get familiar with Yves Rocher Foundation. Please read the information carefully as in the next questions you will need to answer questions for it.
Yves Rocher Foundation
Yves Rocher Foundation is a company founded charity. A company founded charity is a separate legal entity from its parent company, having not-for-profit nature. Although, legally independent, these foundations maintain close ties with their parent companies.
COMPANY FOUNDED FOUNDATION
Yves Rocher Foundation has more than 25 years experience in the fight for the biodiversity protection and enrichment by providing support and financial aid for local, alternative and effective initiatives across the globe.
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The mission of Yves Rocher Foundation is to commit for a better world where people and nature thrive in harmony.
===== page break =====
Please answer the following questions about Yves Rocher Foundation. (Dodds (2014)
1. How much trust and confidence do you have in Yves Rocher Foundation?
0 (Don't trust Yves Rocher Foundation at all) 10 (trust Yves Rocher Foundation completely)
2. How much trust do you have for Yves Rocher Foundation, to make a positive difference to the cause they are working for?
0 (Don't trust Yves Rocher Foundation at all) 10 (trust Yves Rocher Foundation completely)
3. How much trust do you have for Yves Rocher Foundation, to ensure its fundraisers are honest and ethical?
0 (Don't trust Yves Rocher Foundation at all) 10 (trust Yves Rocher Foundation completely)
4. How much trust do you have in Yves Rocher Foundation, to make independent decisions, to further the cause they work for?
0 (Don't trust Yves Rocher Foundation at all) 10 (trust Yves Rocher Foundation completely)
5. How much trust do you have for Yves Rocher Foundation, to be well managed?
0 (Don't trust Yves Rocher Foundation at all) 10 (trust Yves Rocher Foundation completely)
6. How much trust do you have in Yves Rocher Foundation, to ensure that a reasonable proportion of donations make it to the end?
0 (Don't trust Yves Rocher Foundation at all) 10 (trust Yves Rocher Foundation completely)
===== page break =====
Please indicate how likely it is you would donate to Yves Rocher Foundation
Questions Very unlikely (1) to Very likely (7) 7. I intend to donate to Yves Rocher Foundation
8. I am planning to donate to Yves Rocher Foundation
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Please check the circle that best represents your overall impression of Yves Rocher Foundation. Negative O O O O O O O Positive Unfavorable O O O O O O O Favorable Bad O O O O O O O Good Dislike O O O O O O O Like ===== page break =====
9. To what extent did you already know Yves Rocher Foundation?
Not at all O O O O O O O Very much
10. To what extent you have supported Yves Rocher Foundation in the past year?
Not at all O O O O O O O Very much
11. Please choose the last circle – Very much (attention check)
Not at all O O O O O O O Very much
Thank you for answering this set of questions. If you have any further remarks for the charity please write them down. You can also leave this blank.
===== page break =====
Welcome to the 2nd part of the survey. We would now like to ask you some general
questions.
Demographic Questions
1. What is your gender?
Male [] Female [] Trans [] Would rather not say [] 2. What is your age?
3. What is your nationality?
40 Biospheric Values
Please rate between 1 and 7 how important the following actions are for you:
Questions Opposed to my values (1) to Extremely important (7) 1 It is important to prevent environmental
pollution.
2 It is important to protect the environment. 3 It is important to respect the Earth and live in
harmony with the other species.
4 It is important to respect and preserve nature.
===== page break =====
In the next questions we want to ask you about you general opinion about the charity sector as a whole and your own experience with it.
Agreement - score 0 (low) to 10 (high) 1. I trust charities more if I am satisfied they are well managed
2. Charities play a very important role in society today 3. I trust charities more if I have heard of them
4. I trust charities more if I can research them online (website,reviews, social media etc.)
5. I trust charities that I feel a personal connection to
6. Charities are sufficiently regulated to ensure they act for the public benefit
7. I trust big charities more than smaller ones 8. I trust charities if they assist overseas
===== page break =====
Thank you for participating in the survey! With your input we are able to better understand how people evaluate charities and what role they take in their lives.
The survey is designed to compare 2 types of charities as you have seen only one of them. The both types are Yves Rocher Foundation, which is company founded charity and the other one is Rainforest Alliance which is independently founded charity.
If you are interested in either of them here you can find more information about them:
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Appendix B
Tests for ReliabilityTable 1
Reliability Test for Donation Intent
Case Processing Summary Reliability Statistics
N % Cronbach's Alpha N of Items Willingness to donate Valid 178 100.0 .932 2 Excludeda 0 .0 Total 178 100.0 Trust in Specific charities Valid 178 100.0 .936 6 Excludeda 0 .0 Total 178 100.0 General trust in charities Valid 178 100.0 .836 8 Excludeda 0 .0 Total 178 100.0
Biospheric Values Valid 178 100.0 .851 4 Excludeda 0 .0
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Appendix C
ANOVA TablesTable 2
ANOVA Test Results for the Difference in Donation Intent in the Two Groups
Donation intent
Sum of
Squares Df Mean Square F Sig.
Between Groups 14.327 1 14.327 5.863 .016
Within Groups 430.079 176 2.444
Total 444.406 177
Table 3
ANOVA Test Results for the Difference in Trust in the Rainforest Alliance and Yves Rocher
Foundation
OveralTrust
Sum of
Squares Df Mean Square F Sig.
Between Groups 14.900 1 14.900 5.190 .024
Within Groups 505.305 176 2.871
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Appendix D
Correlation Analysis Result
Table 4
Correlation Analysis Between Trust levels and Donation Intent
Donation intent
Overall trust in the charity group
General Trust in charities
Donation Intent Pearson Correlation 1 .474** .331**
Sig. (2-tailed) .000 .000 N 178 178 178
Table 5
Correlation between the two levels of trust to eliminate multicollinearity
OvTrust
General Trust Average score OvTrust Pearson Correlation 1 .470**
Sig. (2-tailed) .000 N 178 178 General Trust Average score Pearson Correlation .470** 1
Sig. (2-tailed) .000
N 178 178 **. Correlation is significant at the 0.01 level (2-tailed).
Table 6
Correlation between Biospheric values and trust
Biospheric
values General trust
Overall Trust Biospheric values Pearson Correlation 1 .120 .073 Sig. (2-tailed) .112 .332 N 178 178 178
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Appendix E
Regression Analysis Results
Table 7 Model Summaryb Model R R Square Adjusted R Square Std. Error of the Estimate 1 .485a .235 .226 1.394
a. Predictors: (Constant), Rainforest Alliance Group, OvTrust b. Dependent Variable: Willingness to donate
Table 8
ANOVAa
Model Sum of Squares df Mean Square F Sig. 1 Regression 104.373 2 52.187 26.858 .000b
Residual 340.033 175 1.943 Total 444.406 177
a. Dependent Variable: Willingness to donate
b. Predictors: (Constant), Rainforest Alliance Group, OvTrust
45 Table 10 Model Summaryb Model R R Square Adjusted R Square Std. Error of the Estimate 1 .169a .029 .023 1.694
