Does Windfall Money Encourage Charitable Giving? An Experimental Study

Li, Huafang; Liang, Jie; Xu, Hui; Liu, Yingxi

doi:10.1007/s11266-018-9985-y

Cited by 28 publications

(15 citation statements)

References 42 publications

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“…Average contributions in experiment 1 are higher as compared to experiment 2. This finding is supported by the literature, which suggests that people are more generous and risk-takers when they receive a windfall endowment rather than an earned one (Carlsson et al, 2013;Dankov and Servátka, 2015;Li et al, 2019).…”

Section: Resultssupporting

confidence: 73%

Intergenerational and intragenerational preferences in a developing country to avoid climate change

et al. 2023

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Intergenerational and intragenerational approaches to climate change take into account the actions taken by the current generation to maintain or improve the climate, which is advantageous to both the present and future generations. Climate-friendly initiatives primarily benefit future generations, with current generations receiving lesser benefits. Self-interest can hinder the management of shared resources, as seen in the “tragedy of the commons” concept, where individuals benefit from defecting, but society bears the consequences of it. This study used three different time horizons to determine the inter- and intra-generational preferences of groups of human subjects for preventing hazardous climate change. We looked at how groups of participants responded in scenarios that varied in motivation, income, social pressure, and learning opportunities. For this purpose, we conducted two group experiments framed around climate change where participants could choose to cooperate for a noble cause: tree plantations. Its rewards are delayed by several years and probably a few decades (intergenerational discounting), where future generations will be the big beneficiaries. There were two more options: the first one delayed the reward by 1 week, and the second was delayed by seven weeks (intragenerational discounting). We found that intergenerational discounting was high when the groups had free will and motivation. Further, it is revealed that having more money does not play a significant positive role in long-term climate sustainability in a developing country; however, it does, but not as much as motivation and free will do.

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Section: Resultssupporting

confidence: 73%

Intergenerational and intragenerational preferences in a developing country to avoid climate change

et al. 2023

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“…Also, it is possible that individuals making small-amount donations are less likely to spend their time and energy to process the meaning of nonprofit overhead and thus are less sensitive to a high overhead ratio (Hibbert & Horne, 1996;Tinkelman & Mankaney, 2007). Another possible explanation is that using windfall money or experimental compensation, instead of using money from the participants' own pockets, may make the participants less concerned about the overhead expenses (Carlsson, He, & Martinsson, 2009;Li, Liang, Xu, & Liu, 2018). Overall, our findings support the notion that donors avoid giving or give less to nonprofits with high overhead expenses.…”

Section: Discussionmentioning

confidence: 99%

Breaking the nonprofit starvation cycle? An experimental test

Hung

Frumkin

2020

JBPA

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Donors' overhead aversion leads to a starvation cycle that hampers the ability of nonprofits to fulfill their missions. This study provides new evidence and suggests possible solutions to break the starvation cycle. Drawing on agency theory, this study adopts a between-subject experimental design to test two strategies for nonprofits with high overhead that seek to overcome donors' overhead aversion. The results suggest that donors are indeed troubled by high overhead ratios. However, charitable contributions to high-overhead nonprofits could be significantly increased if the nonprofits provide information regarding their organization’s performance and transparency. The study contributes to the literature in two ways: It analyzes the starvation cycle from the donors' perspective rather than nonprofits' perspective, and it tests proactive strategies in response to overhead aversion. This study concludes that breaking the nonprofit starvation cycle could begin with nonprofits taking a more open and direct stance when confronting the issue of overhead aversion.

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“…Thus, future work is needed to assess effects of these kinds of manipulations in real-world settings. Additionally, the endowments were windfall gains, and people tend to be less generous with resources when they are instead earned ( Carlsson et al, 2013 ; Li et al, 2019 ). To test this possibility, future work should compare the effect of windfall versus earned resources on intergroup interactions in this context.…”

Section: Discussionmentioning

confidence: 99%

Promoting prosocial behavior in an unequal world

et al. 2023

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Amid a global pandemic and the climate crisis, there is an increasing need to understand how to promote largescale, coordinated action between different groups. Yet certain factors such as inequality can hinder cooperation. We aimed to establish how to orient groups toward a superordinate goal when they have unequal resources. Participants were divided into two ‘countries’ and asked to assemble LEGO bricks into food (by building pieces in a certain order) to prevent starvation among ‘the people’. One ‘country’ had few LEGO bricks whereas the other had an abundance, and the only way to maximize food creation was for the groups to work together. We assessed the efficacy of three diverse interventions on superordinate behavior and attitudes: compassion meditation training (Study 1), lower inequality (Study 2), and the introduction of a pro-sharing group norm by a confederate (Study 3). Compassion meditation training and altering the degree of inequality between groups did not have a clear effect on collaborative action. Only the introduction of a pro-sharing group norm enhanced sharing behavior, made participants feel more cooperative and reduced fears of being compassionate toward others. Our findings speak to the importance of leadership in promoting coordinated action to address challenges that face the superordinate group.

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Does Windfall Money Encourage Charitable Giving? An Experimental Study

Cited by 28 publications

References 42 publications

Intergenerational and intragenerational preferences in a developing country to avoid climate change

Intergenerational and intragenerational preferences in a developing country to avoid climate change

Breaking the nonprofit starvation cycle? An experimental test

Promoting prosocial behavior in an unequal world

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