Project title

Why Donors Donate: Disentangling Organizational and Structural Heuristics for International Philanthropy

Purpose of the study

In the wake of the global crackdown on civil society, international nongovernmental organizations (INGOs) have faced worsening constraints on their ability operate and raise funds. Official aid flows have decreased substantially in countries that have imposed restrictive anti-NGO laws and large foundations and government agencies have reduced their contributions to NGOs in repressive countries. In response to this dramatic shift in the NGO funding landscape, organizations have increasingly turned to foreign individual donors to offset the loss of governmental and foundation funding. Given increased crackdown on NGOs across the world, how do individual donors in the U.S. feel about donating to legally besieged NGOs abroad? Do legal restrictions on NGOs influence donors’ decision to donate? We argue that domestic political environments of NGO host countries can influence preferences of foreign private donors and that legal crackdowns on NGOs serve as a heuristic to donors of organizational deservingness. We use a conjoint survey experiment to disentangle these questions. We theorize that organizational characteristics like managerial practices, issue area, and funding sources all influence the decision to donate to an NGO. At the same time, we propose that structural characteristics like an NGO’s host-country political and legal environment can also serve as donor heuristics. Donors who see that an NGO faces general legal trouble abroad will use that knowledge to decide whether or not to donate. Our theory and findings contribute to the field of nonprofit studies by providing a richer understanding of donor decision making and a better theoretic connection between private philanthropic behavior and host country politics, especially for NGOs working in the Global South.

Research question

We use a conjoint survey experiment to examine the impact of organizational and structural features of NGOs on donors’ decisions to donate. We are interested in whether the contentiousness of an NGO’s relationship with its host government influences donor decision making. Do donors care if nonprofits they care about are criticized by or kicked out of the countries they work in?

We are also interested in the effect of organizational characteristics on donor decision making. Do managerial practices (financial transparency and accountability systems), funding sources (private donations and government grants), and issue areas (emergency response, environmental issues, human rights, and refugee relief) also serve as heuristics that signal an organization’s deservingness to donors?

To test possible confounding and mediating effects, we also plan to see how donor characteristics influence the decision to donate, including political ideology, political knowledge, religious attendance, involvement in charitable activities, involvement in activism, and other demographic characteristics.

Hypotheses

We theorize that structural characteristics like an NGO’s host-country political and legal environment can serve as heuristics and shortcuts for donors. Donors who see that an NGO faces general legal trouble abroad will use that knowledge to decide whether or not to donate. We also theorize that non-structural organizational characteristics like managerial practices, funding sources, and issue area also serve as heuristics and influence donation patterns.

In previous research, Chaudhry and Heiss (2019) found that donors are more likely to donate (and donate more) to organizations facing legal difficulty abroad under some circumstances (when an NGO focuses on humanitarian issues and when it is privately funded). In this study, we simultaneously account for the interaction between legal crackdown, issue area, funding source, and managerial practices as well as donor characteristics. We hypothesize that each of these structural and organizational characteristics will have a significant effect on donor behavior, but we’re unsure of the direction of that effect.

Methods and analysis

We use conjoint analysis (Chandukala et al. 2008) to present respondents with 4 hypothetical organizations that have 4 randomly assigned features. Respondents will be shown 12 sets of hypothetical organizations. This partial fractional factorial design results in 288 (4 × 4 × 2 × 3 × 3) possible combinations of features, and no single respondent will be offered every combination. We will use hierarchical Bayesian modeling to analyze the role each of these features plays in the decision to donate to an NGO. We will build a set of statistical models that predict donation patterns based on (1) organizational and structural factors on their own and (2) organizational and structural factors combined with donor characteristics and demographics. We will then compare these different models to determine which combination of covariates is most predictive of donation.

Participant activities

We use an online survey, hosted at Qualtrics, to collect our data. We have designed this survey to measure and test each of our hypotheses—after collecting demographic information about respondents, the survey presents 12 random combinations of managerial practices, issue areas, funding sources, and relationships with host governments and asks respondents if they would be willing to donate to such an organization.

Subject selection and recruitment

Participants of the survey experiment will be recruited through Centiment, a commercial online provider of high quality nonprobability opt-in survey panels. Centiment ensures panel quality by actively recruiting representative samples of the US population and provides monetary incentives and rewards to participants.

To see how varying NGO characteristics influence the decision to donate, our sample will be representative of a population of people who are likely to donate to charity. We ask potential participants a screening question early in the survey (“Q2.5: How often do you donate to charity”). If a participant responds that they give to once every few years or never, they will be disqualified from the study and the survey will end early.

The 1,000 subjects constitute a sufficient size for model estimation. A sample size of at least 500 respondents is typical for estimating a hierarchical Bayesian model based on conjoint data. We double this amount because we are interested in analyzing subpopulations of respondents, which requires a larger sample. We present respondents with 4 hypothetical organizations that have 4 randomly assigned features. Respondents will be shown 12 sets of hypothetical organizations. This partial fractional factorial design results in 288 (4 × 4 × 2 × 3 × 3) possible combinations of organization features, and no single respondent will be offered every combination. To provide better coverage and arrive at better individual-level estimates, we use a larger sample size.

We will provide Centiment with a link to the survey, which is hosted by Qualtrics. Centiment will then distribute the link to their panel. Centiment will monitor how many surveys are successfully completed and will solicit responses until our 1,000 target is met. After the survey is complete, respondents will receive payment from Centiment. We will have no direct contact with participants during or after the study.

The first page of the survey contains a consent statement that participants must agree to before continuing with the experiment.

Data security and participant privacy

We will not collect personally identifiable data.

The results will initially be stored on Qualtrics’ servers, and both Centiment and Qualtrics use SSL encryption (HTTPS) when collecting data from panel participants and transferring data to servers, so responses will remain confidential during the administration of the survey. The research team will download the results onto their personal computers. There is no identifying information in the data downloaded from Qualtrics.

After publication of the project’s results, a cleaned and simplified version of the data will be made available in a long-term replication repository. This data will not contain identifiable information and will be safe to store and use without extra security measures.

Compensation

Participants are compensated through Centiment’s internal reward system through cash, points, and other incentives. Centiment does not provide precise details of participant compensation. Centiment states that their compensation is “fair,” and the company’s business model encourages the company to find and maintain high quality panelists. We thus infer that the amount provided is fair and justified. Centiment users receive compensation from the company following the completion of the survey.

Risks and benefits

Subjects will not directly benefit from participating in this research. The results of the survey will be used to improve nonprofit operations and strategy, especially for organizations working in developing countries. The results can help nonprofits understand how better to market themselves in countries where governments do not approve of civil society organizations, and what obstacles these organizations face in their philanthropic activities. The project’s results will be disseminated within the political science and public policy academic community via conferences and articles and to officials working at these nonprofits.

There are minimal potential risks to subjects who participate in this research. The experiment does not include false information or deception. Participants may feel discomfort using the computer, but the risks are not greater than those ordinarily encountered in daily life. Research subjects can exit the survey at any time for any reason.

Background and significance

In the wake of the global crackdown on civil society, international nongovernmental organizations (INGOs) have faced worsening constraints on their ability operate and raise funds. Official aid flows have decreased substantially in countries that have imposed restrictive anti-NGO laws and large foundations and government agencies have reduced their contributions to NGOs in repressive countries (Chaudhry and Heiss 2018; Dupuy and Prakash 2018). In response to a dramatic shift in the NGO funding landscape, organizations have increasingly turned to foreign individual donors to offset the loss of governmental and foundation funding (Banks, Hulme, and Edwards 2015). This is because donations from domestic donors in repressive countries are unreliable and inconsistent. Citizens in the Global South often cannot support local NGOs, may lack a culture of philanthropic giving, or may channel funds to groups working on non-contentious issues (Dupuy, Ron, and Prakash 2015). NGOs have thus increasingly sought out funds from foreign donors in countries with institutions more amenable to philanthropy.

Individuals donate to international charities and NGOs for a host of reasons. Recent work by Bekkers and Wiepking (2011) has identified eight mechanisms for why people engage in philanthropy. These mechanisms include awareness of need, solicitation, costs and benefits, altruism, reputation, psychological benefits, values, and efficacy. Wiepking (2010) finds that NGOs with an international focus are more likely to receive donations from people who are older, religious, left-leaning. Despite the wide range of motivations that drive individuals’ philanthropic habits, these studies overall find low levels of giving to overseas causes or international groups (Micklewright and Schnepf 2009; Rajan, Pink, and Dow 2009; Casale and Baumann 2015; Knowles and Sullivan 2017; Tremblay-Boire and Prakash 2017; Atkinson et al. 2012). As Casale and Baumann (2015) point out, only small proportion of private donors donate to international charity because the number of recipients are often so large and generally far removed the donor.

In theory, perfectly rational donors should scrutinize each aspect of an NGO’s organizational structure and programmatic performance prior to donation. Instead, donors rely on shortcuts, signals, and heuristics to determine the trustworthiness of NGOs, since seeking out complete information about an organization’s deservingness and efficiency is costly and time-consuming (Szper and Prakash 2011). One common signal for donors is organizational efficiency, such as overhead costs or accountability practices. Another heuristic for deservingness is the issue area an NGO engages in—organizations that address humanitarian issues have broader appeal to donors who might shy away from NGOs dealing with more political causes like human rights (Bush 2015). NGO funding sources also serve as a signal of how effective individual donor action might be. Donors are likely to not contribute to NGOs that rely heavily on government grants since their donation might feel more impersonal and less needed, while donors are likely to give to organizations that rely primarily on private donations given that they may feel personally invested in the organization. Each of these signals is organizational.

NGOs typically have direct control over its organizational practices, mission and issue area, and funding sources. NGOs have less control over structural issues, and the role of political and legal institutions in donor decision making has been understudied. However, over the past decade international NGOs have become increasingly politicized and legally restricted around the world. Dozens of countries have imposed legal restrictions on international NGO funding, missions, and programs, and in many countries, NGOs have been forced to close down operations and leave. How do individual donors respond when NGOs are kicked out of their host countries? How does legal crackdown abroad affect perceptions of an NGO’s deservingness or efficiency?

In this study, we thus argue that domestic political environments of NGO host countries can influence preferences of foreign private donors and that legal crackdowns on NGOs serve as a heuristic to donors of organizational deservingness.