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Do Donors Care About the Price of Giving? A Review of the Evidence, with Some Theory to Organise It

  • Jade Wong
  • Andreas Ortmann
Original Paper

Abstract

We study how donors decide about which charity to give to. To this end, we construct a theoretical model that clarifies the conditions under which the stand-alone benefit from giving, the charity price (i.e. the fundraising expenditure and overhead costs claimed by the charity providing services), and the information cost (i.e. the cost of information acquisition) inform giving decisions. We define the price of giving as the sum total of charity price and information cost. The model shows that giving decisions might be affected by a price–information trade-off—a condition where donors care about the charity price because they want their donations to maximise charitable output, but dislike searching for the charity price because it is costly. The literature is then reviewed to test the explanatory power of the theoretical model. The review provides evidence in favour of a price–information trade-off.

Keywords

Not-for-profits Charities Price of giving Efficiency Watchdog organisations Information costs 

Résumé

Nous étudions comment les donateurs déterminent à quelles associations caritatives ils vont donner. À cet effet, nous élaborons un modèle théorique qui précise les conditions dans lesquelles l’avantage à part entière à faire un don, le prix de l’organisme de bienfaisance (les dépenses de collecte de fonds et les frais généraux réclamés par l’organisme offrant les services, par exemple) et le coût des informations (le coût d’acquisition des informations, par exemple) informent les décisions de dons. Nous définissons le prix des dons comme la somme totale du coût de l’organisme de bienfaisance et le coût des informations. Le modèle montre que les décisions de dons peuvent être affectées par un compromis sur les informations tarifaires – une condition où les donateurs se préoccupent du prix de l’organisme de bienfaisance parce qu’ils veulent que leurs dons augmentent autant que possible le résultat des organismes de bienfaisance, mais n’aiment pas rechercher le prix de cet organisme, car il est coûteux. Les publications sont ensuite examinées pour tester le pouvoir explicatif du modèle théorique. Cet examen fournit des preuves en faveur d’un compromis sur les informations tarifaires.

Zusammenfassung

Wir untersuchen, wie Spender entscheiden, an welche gemeinnützige Einrichtung sie spenden. Dazu erstellen wir ein theoretisches Modell, das die Bedingungen erläutert, unter denen der separate Vorteil aufgrund von Spenden, der karitative Preis (d. h. die von der gemeinnützigen Organisation, welche die Dienstleistungen bereitstellt, angegebenen Aufwendungen im Zusammenhang mit der Mittelbeschaffung und fixen Kosten) sowie die Informationskosten (d. h. die Kosten im Zusammenhang mit der Informationsgewinnung) Spendenentscheidungen beeinflussen. Wir definieren den Spendenpreis als die Gesamtsumme des karitativen Preises und der Informationskosten. Das Modell zeigt, dass Spendenentscheidungen von einem Preis-Informationskonflikt beeinflusst werden können - ein Umstand, bei dem der karitative Preis für Spender von Bedeutung ist, weil sie sich von ihren Spenden das maximale gemeinnützige Resultat wünschen, sie jedoch nicht den karitativen Preis nachforschen möchten, da dies mit Kosten verbunden ist. Anschließend wird die Literatur geprüft, um die Aussagekraft des theoretischen Modells zu testen. Die Literaturprüfung liefert Anhaltspunkte für einen Preis-Informationskonflikt.

Resumen

Estudiamos cómo los donantes deciden a qué organización benéfica dar. Con este fin, construimos un modelo teórico que clarifica las condiciones en las que el beneficio independiente de dar, el precio de la organización benéfica (es decir, el gasto de recaudación de fondos y los costes generales indicados por la organización benéfica que proporciona los servicios), y el coste de información (es decir, el coste de adquisición de información) informan la decisión de dar. Definimos el precio de dar como la suma total del precio de la organización benéfica y el coste de información. El modelo muestra que la decisión de dar puede verse afectada por un compromiso entre precio-información - una condición en la que los donantes se preocupan por el precio de la organización benéfica porque desean que sus donativos maximicen los resultados benéficos, pero les disgusta buscar el precio de la organización benéfica porque es costoso. Después, se revisa el material publicado para probar el poder explicativo del modelo teórico. La revisión proporciona evidencias a favor de un compromiso entre precio-información.

我们研究了捐赠人如何决定要捐赠的慈善组织。对此,我们构建了一个理论模型,以了解捐赠的单独好处、慈善价格(即提供服务的慈善组织的筹款支出和日常开支成本)和通知捐赠决定的信息成本(即信息采集)。我们将捐赠价格定义为慈善价格和信息成本的总和。该模型表明,捐赠决定可能受价格信息权衡的影响 – 其中捐赠人关心慈善价格,因为他们希望捐赠最大化慈善输出;但是,不太喜欢搜索慈善价格,因为这过于昂贵。然后,本研究查阅了各种文献以测试理论模型的解释力,从而提供有利于价格信息权衡的证据。

本研究では、資金提供者がどのように慈善団体に寄付を行うかを研究する。このため理論的モデルを構築して、慈善活動費用(すなわちサービスを提供する慈善団体が主張する資金調達支出と経費)と情報コスト(すなわち情報取得の費用)という資金におけるスタンドアロンの恩恵を与える条件を検討する。慈善活動費用と情報のコストの合計価格の資金を明らかにする。資金の決定権では、価格情報のトレードオフ、つまり資金提供者がどの慈善活動費用に関心を持つかという条件によって影響を受けるが、寄付金が慈善活動を最大になっても、調査費用を考えて慈善活動費用を調査したくないことがモデルからわかる。文献を用いて理論モデルの説明力をテストして検討する。そして価格情報のトレードオフを支持する証拠を提示する。

ندرس كيف يقرر المانحين لأي مؤسسة خيرية يعطون. تحقيقا˝ لهذه الغاية، أقمنا نموذج نظري يوضح الظروف التي الفائدة القائمة بذاتها من العطاء، سعر العمل الخيري (أي نفقات جمع الأموال والتكاليف العامة التي تطالب بها الجمعية الخيرية التي تقدم خدمات)، وتكلفة المعلومات ،(مثل٬ تكلفة الحصول على المعلومات) إبلاغ إعطاء القرارات. نحدد سعرالعطاء مثل مجموع سعرالعمل الخيري وتكلفة المعلومات. النموذج يظهر إعطاء القرارات يمكن أن يتأثر بالمفاضلة بين سعر المعلومات – الحالة التي فيها يهتم المانحين بسعر العمل الخيري لأنهم يريدون تبرعاتهم تزيد الإنتاج الخيري إلى حد كبير، لكن يكرهون البحث عن سعر العمل الخيري لأنه مكلف. ثم يتم مراجعة الأدبيات لاختبار القوة التفسيرية للنموذج النظري. تقدم المراجعة الأدلة في صالح المفاضلة بين السعر- المعلومات.

Notes

Acknowledgments

The authors like to thank two referees for this journal for the latter’s helpful comments. Special thanks to Rene Bekkers. The usual caveat applies.

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Copyright information

© International Society for Third-Sector Research and The Johns Hopkins University 2015

Authors and Affiliations

  1. 1.Centre for Social Impact, UNSW Australia School of BusinessUNSWSydneyAustralia
  2. 2.School of Economics, UNSW Australia School of BusinessUNSWSydneyAustralia

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