A Study of Incentives in Charitable Fundraising

Abstract

The purpose of this study is to determine how self-driven (intrinsic motivators) and monetary incentives (extrinsic motivators) are mediated by 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. 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, effort is directly observed over time. 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 effort. Fundraisers filled out pre- and post-study surveys. Whereas high monetary incentives result in the greatest immediate increase in funds raised, they crowd out future intentions to volunteer once incentives are withdrawn. Mediation analyses show that fundraiser effort fully mediates the effect of intrinsic motivators and partially mediates the direct effect of extrinsic motivators on funds raised.