Drivers and Inhibitors of Online Donations to Nonprofit Organizations

Abstract

ABSTRACT Despite the overall economic and social importance of nonprofit organizations and the plethora of scholarly literature on electronic commerce, few authors have combined these two fields to tackle the issue of online donations to nonprofit organizations. In this paper we first present a framework that illustrates several antecedents of online donations. After discussing the descriptive results from two surveys, we compare different user groups regarding their attitudes toward online donations. The results suggest that our scales exhibit sufficient reliability and validity and that the two groups differ significantly. Furthermore, we conduct a regression analysis with the cause, trust in the organization, trust in the Internet, and privacy as independent variables and the people's intention to donate online as the dependent variable. Trust in the Internet turns out to be by far the most important influencing factor, exhibiting a significant influence on people's attitude toward donating to nonprofit organizations online. INTRODUCTION Nonprofit organizations seek to effect positive change for the public good. In order for them to fulfill their mission they are dependent on donations from the general public (Guy & Patton, 1989). Over the past decade, electronic-commerce applications have become an indispensable communication channel, supporting the work of nonprofit organizations in two ways. First, e-commerce helps them to disseminate information and communicate with audiences more rapidly. Second, the Internet functions as a fundraising channel, enabling nonprofit organizations to solicit donations online, which reduces their expenses for attracting donations. Offering information, interaction and fundraising capabilities to nonprofits, the Internet has opened up unparalleled opportunities for nonprofits to further their causes and enter into relationships with potential, current, and lapsed donors (MacKay, Parent, & Gemino, 2004; Oly Ndubisi, 2007; Treiblmaier et. al., 2004). However, nonprofits typically have limited skills, time and budget available to develop and maintain sophisticated Web sites (Hooper & Stobart, 2003). Loiacono and McCoy (2004) have shown that only a small amount of nonprofit websites can be accessed by people with disabilities. Since accessibility is one important indicator of how up-to-date a website is, this suggests that many nonprofit websites lag behind current standards of modern web development and design and need to acquire technological expertise to exploit such opportunities (Te'eni & Young, 2003). Nonprofit websites have also been found to lag behind commercial websites in terms of relational constructs that facilitate use of the site as well as navigation, interaction, and customization on the site (Sargeant, West, & Jay, 2007). A large proportion of nonprofits use third parties to process their donations, as they do not have the required expertise in-house (Waters, 2007). Nonprofits therefore also face the problem that the expenses associated with building and maintaining websites are perceived as a waste of their members' contributions (Wenham, Stephens, & Hardy, 2003). Another challenge in online fundraising is the Web's nature as a pull medium, which entails that site traffic is a determinant of the volume of donations collected online. Even regular donors of a particular nonprofit organization may never visit its website, unless it offers vital information, such as health and medical information (Sargeant, 2001). Despite these challenges, more and more nonprofits compete for donations online. In this study we seek to identify factors fostering or hindering people's propensity to donate online. We first review the relevant literature and present a framework identifying the antecedents of online fundraising, before we introduce the research design. We then go on to present and discuss the findings of a survey conducted among donors and non-donors, including a student convenience sample serving as a control group. …