When donors learn that a gift they intended for a specific charitable project was used for another cause, they feel betrayed and often punish the charity, according to a new study at Washington State University (WSU).
The findings, published in the Journal of the Association for Consumer Research, reveal that disgruntled donors are less likely to give money or do volunteer work for the charity in the future and are more likely to say negative things about the organization.
The study comes amid the increasing popularity of donor-directed charities. Instead of giving to a traditional charity that supports multiple causes, many people prefer to specify that their contributions will support a new well in a Tanzanian village, for example, or help a Costa Rican entrepreneur open a coffee business.
As a result, contributions to donor-directed charities, such as Donors Choose and Kiva, have risen by 700 percent over the past decade.
Jeff Joireman, Ph.D., a professor in the Department of Marketing and International Business at WSU’s Carson College of Business, said the study findings held true even when a donor’s contribution was directed to another worthy cause.
“The whole idea that a charity could activate a sense of betrayal is quite novel,” said Joireman, who worked with research collaborators from Pacific Lutheran University, HEC Montreal, University of Wyoming and WSU Ph.D. student Pavan Munaganti.
“This wasn’t fraud or embezzlement — the donor’s money was still being used for good,” Joireman said. “But because the expectations were so high, they were upset when their donation was redirected.”
The research involved three studies conducted at WSU’s Center for Behavioral Business Research. Study participants made $1 donations to specific projects in rural areas of India or Peru, then they were told the charity used their money for a different purpose.
Respondents were most upset when their money was directed away from projects considered essential for survival, Joireman said. If they wanted their donation to finance a drinking water project, for instance, and it was used for a library instead, they had higher feelings of betrayal than if the library donation was used for the drinking water project.
In both instances, however, the participants chose not to support the charity with their next donation.
Charities are seen as “moral actors” by the public and held to high standards, the study shows. These high standards magnify people’s sense of betrayal when a charity re-directs funds, Joireman said.
“It’s almost like finding out that a police officer has committed a crime,” he said.
In the information age, stories about charities redirecting funds can easily go viral, said Mark Mulder, Ph.D., a coauthor of the research and associate professor at Pacific Lutheran University.
He gives the example of country singer Garth Brooks, who sued an Oklahoma hospital when it wouldn’t return a $500,000 donation that Brooks thought was going to fund a women’s health center named after his mother, but was used by the hospital for other purposes. When Brooks prevailed in his lawsuit, the New York Times published an article on the story.
“When it happens, the cases often become high profile,” Mulder said. “The stories are publicized on national news outlets and are shared on social media by individual users.”
The research highlights the importance of transparency among charities regarding how donations are used, Joireman said.
“Donor-directed contributions are popular because they foster a sense of connection and impact,” Joireman said. “But people feel betrayed if their money doesn’t go to where they thought it would. The main takeaway is: Do what you say you’re going to do.”
Source: Washington State University