Explaining communication effects on donation behavior: the roles of contractual relations and social information
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Nonprofits play a pivotal role in society, and individual donations are the backbone of these organizations. The fight for donors, however, is more intense than ever, and charities face decreasing support from governments and declining growth in individual donations. The major response to these challenges is a greater focus on the effectiveness of marketing and communication strategies. Unfortunately, research-based knowledge on how to design effective communication activities that enhance donation behavior is still limited. Our contribution is related to four research questions: (1) What is the effectiveness of different communication efforts, including direct marketing, advertising, and publicity, in persuading donors to migrate to a contractual relationship with the charity? (2) How does donors’ contractual relationship affect their responsiveness to the charity’s communication activities? (3) To what extent (and how) does nonspecific social information affect donation behavior, and which variables mediate its effects? (4) Which charity-specific factors and context factors moderate the effects of nonspecific social information on donation behavior? The first empirical study (Article 1) provides answers to RQ1 and RQ2. We apply econometric analyses to time series data from an international human rights organization to investigate a mixed setting in which donors contribute to the charity on an ad hoc basis (noncontractual donation) or via a regular donation scheme (contractual donation) and change their relationships with the charity over time. The findings offer novel insights into the relative effectiveness of advertising, direct marketing and publicity in stimulating contributions among contractual and noncontractual donors. We also offer new insights into the relative effects of communication activities on the decision to become a contractual donor. We address RQ3 and RQ4 in two experimental papers (Articles 2 and 3). Across a series of online experiments, we test the prediction that publicity in the form of positive nonspecific social information (i.e., the information that many have already donated) may stimulate people’s willingness to support a new charity and boost donation amounts. We test three mediators of this effect: response efficacy, the attitude toward the charity, and the attitude toward the donation. We also test three potential moderators that we expect to decrease the effects of social information on donation behavior: knowledge about the charity, the importance of the cause, and money reminders. The experimental results offer new insights into the effects of social information on donation behavior, including insights into why such effects occur and when the effects become stronger or weaker. We conclude with discussions of theoretical implications, managerial implications, the limitations of our studies, and avenues for future research.