Perceived donation efficacy (PDE) is the degree to which a donor believes that a charitable gift will make a difference in the cause that he or she is supporting. Extant research leaves important questions to be answered about the kinds of fundraising models that affect PDE, and PDE’s subsequent influence on charitable giving. We find that PDE and, in turn, charitable giving can be impacted by a newly proposed fundraising model that substitutes volunteer service for miles walked in the more traditional “walk-a-thon” model. The real-world success of the service fundraising model is first established in a field study with an actual nonprofit organization. Subsequent experiments further suggest that the influence of fundraising models on PDE is broader than simply making more efficient use of donors’ dollars. We also offer the first empirical evidence that PDE mediates the relationship between fundraising models and charitable giving.

Introduction

The impact of nonprofit organizations is far-reaching and vital to the wellbeing of humanity. In many communities around the world, nonprofit organizations provide some of the most basic and essential services to those in need – services such as access to clean water, food and shelter. However, despite the valuable work most of these organizations perform, many lack resources and find themselves understaffed and underfunded. According to a 2015 survey of nonprofit organizations (Nonprofit Finance Fund, 2015) more than three-fourths of those surveyed reported an increase in demand for services, yet more than half of them couldn’t meet demand. Of those who reported that they could not meet demand, 71% stated that they couldn’t provide services due to a lack of resources. Based on the potentially dire consequences of these shortcomings, it is imperative to better understand what drives charitable giving so that nonprofit organizations can maximize their aid to the underprivileged. Contrasted against the general struggle of nonprofit organizations, one – Charity: Water – has garnered significant attention for its success, raising a quarter of a billion dollars in ten years and bringing clean water to over seven million people in developing countries (National Retail Federation, 2017).