Donation Behavior

Group E Group E VU University 2011-2012 VU University 2011-2012 Donation Behaviour Noortje Vlek 2500825, Danny Kornman 2500148, Nicole Prince 2163470 Business Research Methods IBA1. 04 14th of October 2010 Teacher; Maria Aladjem Table of Contents 1. Introduction and problem statement3 2. Hypothesis Development4 2. 1 Personal link to the cause and intention to donate4 2. 2 Good brand personality of a non-profit organization and intention to donate4 2. 3 Income in relation to the intention to donate5 3. Method6 3. 1 Sample & Procedure6 3. 2 Measurement instruments6 3. Statistical analyses7 4. Results8 4. 1 Descriptive statistics8 4. 2 A personal link to the cause has a positive effect on the intention to donate. (hypothesis 1)9 4. 3 A good brand personality of a non-profit organization has a positive effect on the intention to donate. (hypothesis 2)9 4. 4 People with higher income are more likely to donate than people with lower income. (hypothesis 3)9 5. Conclusion and Discussion11 5. 1 Conclusions11 5. 2 Shortcomings and future research11 5. 3 Theoretical implications12 5. 4 Practical implications12 References12 1. Introduction and problem statement Nonprofit organizations are providing many critical services (e. g. culture activities, environmental issues, education, healthcare) since the 16th century (Venable, Rose, Bush & Gilbert, 2005). But in the last couple of decades Non-profit organizations are facing a lot of difficulties. Government has decided to reduce costs and therefore a significant reduction in governmental funding of donation programs has been made. (Venable, Rose, Bush & Gilbert, 2005) For instance, in England, government has decided to cut in charity funding. Non-profit sector in England will receive ? 10m less this year. Government regulations are not the only difficulty non-profit organizations have to deal with. Due to the economic crisis, the donations of non-profit organizations are decreasing. Only 12% of the non-profit organizations in the United States of America expect to run above the break-even point this year. Non-profit organizations that think they are able to cover their operating expenses is on ly 16 percent in both 2009 and 2010. People are saving rather than spending their money. The first cost they cut is giving money to charity. This is why the economy is slowly recovering. But at the same time the number of volunteers is increasing. Number of non-profit organizations has shown an explicit growth. In 1940 there were only 12. 500 non-profit organizations, in the United States of America. Today there are over 1,500,000 non-profit organizations registered. This is an increase of 12,000 %. Which lead to much more competition in the non-profit organizations sector. Therefore non-profit organizations are receiving less money. If we sum up all the above we come to following research question: What are the factors that have an effect on the intention to donate? . Hypothesis Development 2. 1 Personal link to the cause and intention to donate To convince people to donate to a charity, it is important for non-profit organizations to understand that people who have a link to the purpose of an organization are more likely to help them realizing their goals. Previous studies have shown that when an individual has a personal link to the goal of a non-profit organizati on, he or she will probably be more likely to donate to this organization (Sargeant & Woodlife, 2007) E. g. If someone has just been cured of cancer, this person knows how it is feels how it is to go through such an experience and would be more likely to donate to an organization that does research on a cure for this disease, like the American Cancer Society (ACS). The person donating doesn’t only do so because he/she has been told what good it would do for others, but mainly because this person has gone true the same experience as the one being donated to. The impact of this experience leads to a loyal donor. Therefore we expect that the more an individual is linked to the cause of an organization, the more likely this person is willing to donate: H1: A personal link to the cause has a positive direct effect on the intention to donate. 2. 2 Good brand personality of a non-profit organization and intention to donate Another factor that plays a role in donating is brand personality. As can be read in previous studies, non-profit organizations with a bad reputation discourage people from donating to these organizations (Knowles & Gomes, 2010). For instance Greenpeace has a very aggressive way of disapproving of certain companies or even certain government policies. They are often accused of being involved in illegal acts. This puts this organization in a difficult spot. People who are thinking of becoming a donor will take this into account. That is why it is important for a non-profit to have a good reputation. This can be achieved, for example, by providing a good service quality, keeping the donor informed what the organization is doing to reach their goal, but also how their money is being spent. For instance, if a manager of a large non-profit organization has an absurd high salary, people will lose their trust in the organization because they are not comfortable with the way their money is being spent. Therefore we assume it is necessary for an organization to be clear about their mission in order to create donor loyalty: H2: A good brand personality of a non-profit organization has a positive direct effect on the intention to donate. 2. 3 Income in relation to the intention to donate People with a high level of income are more likely to donate to a non-profit organization, because these people are able to buy their necessity goods, take care of their family and are overall secure enough not have to worry about an uncertain future (Knowles & Gomes, 2010). As mentioned in the introduction, a higher level of income is defined as an income that is above standard, which is 65. 000 dollar a year. People with an income below standard are not always able to buy their necessity goods and can’t afford to donate. Let’s take students for example. They are already having problems coming around with their income and are not certain about their future, which will not lead to donating. Therefore we can posit: H3: People with higher income are more likely to donate than people with lower income. The hypothesis relationships are explained in figure 1. Figure 1 Conceptual Model Influences on donation Personal link to the cause Good brand personality Intention to donate Income Personal link to the cause Good brand personality Intention to donate Income Socio-Demographic Difference 3. Method 3. 1 Sample & Procedure When it comes to analysing the intention to donate, we are confronted with large relevant population. Since there aren’t many requirements to become a donor, it is possible for anyone to donate to a non-profit organization. By approaching our unit of analysis (18+) through an online questionnaire we would like to get a better view on the intention to donate. This was done with the use of non-probability samples, where not all elements have the same chance of being included in a sample. In our case we chose for the convenience sampling, since our population is quite vague and hard to define. This way we could be unrestricted, and it is easy to perform. The disadvantages that must be dealt with when it comes to holding a survey are that questions often remain multi-interpretable, the lack depth because of limited preparedness, and the respondents are more likely to give a socially acceptable answer. Some ways to solve these problems are that every consumer must receive an e-mail invitation to participate in a survey. This gives the company a chance to make sure that the same name and contact information isn't already assigned to another e-mail address in the system. Also a minimum time for completing an online survey can be set. This cuts down on cheaters who fly through the survey just randomly answering questions. 3. 2 Measurement instruments An online questionnaire was created for respondents to participate in the survey using the following measurement instruments. Independent variables Personal link to the cause was measured with four ways of being connected to the charity (i. e. , Someone I know has been effected by the issues dealt with by this charity, Someone I know might benefit from my support, My family has a strong link to this charity, This cause is not related to an important aspect of my life). A sum score was calculated by adding up the responses to the question whether respondents were offered these four options. Responses ranged from 1 (completely disagree) to 7 (completely agree). Good brand personality was measured by the quality of the brand name, with the availability of seven options (i. e. , Honest, loving, compassionate, Reputable, Committed, Reliable, Financially stable). A sum score was calculated by adding up responses to the question whether respondents were offered these Seven options. Responses on this two sum score ranged from 1(completely disagree) to 7 (completely agree). Incomer was measured by asking respondents whether they had an income that was lower(0) or higher(1) than $65. 000. Dependent variable Intention to donate was measured with three statements: â€Å"Unlikely-Likely, Improbable-probable, Uncertain-certain†. Respondents could answer on a 7-point scale ranging from 1 (completely disagree) to 7 (completely agree). 3. 3 Statistical analyses With the purpose of testing the three hypotheses presented above, three analyses are performed. In order to test the first hypothesis (A personal link to the cause has a positive effect on the intention to do) a regression analysis will be calculated between the personal link to the cause and the intention to. The second hypothesis (A good brand personality of a non-profit organization has a positive effect on the intention to donate) is also tested via a regression analysis in which a higher good brand personality has an effect on the intention to donate. The third hypothesis (People with higher income are more likely to donate than people with lower income) is tested by means of an independent samples t-test. For all analyses, test values (r in case of the regressions and t in case of the t-test) with a significance of p?. 05 are deemed significant. 4. Results 4. 1 Descriptive statistics Before we start testing our hypothesis, there is a need to review the data obtained by interviewing the unit of analyses in order to check whether there are any outliers or undefined values. We reviewed the item range, percentages, means and standard deviation Results of this review are shown in table 1. Table 1 Variables, Ranges, Percentages, Means and Standard Deviation Variable| Range| Percentage| Mean, SD| Personal link to the cause| 1. 25 – 7. 00 | -| M= 4. 80; SD = 1. 03| Good brand personality| 2. 14 – 6. 34| -| M = 4. 60; SD = 0. 90| Income| 0 – 1| 0. (less than 65,000) = 47%1. (more than 65,000) = 53%| -| Intention to donate| 1. 0 – 7. 00| -| M= 4. 95; SD=0. 90| Seemingly, the data collected do not hold any outliers. Therefore the next step can be taken, which is to construe these descriptive analyses. As can be seen in the table above, in a general sense the respondents interpreted a personal link to the cause and a good brand personality quite h igh. The data shows that on average the respondents offered both, personal link as a good brand personality a 5. The income division is almost 50-50, and in a general sense the respondents had an above average intention to donate. Now we move on to the hypothesis testing analyze. The overall fit of the model: The 5. 9% of the variance of the dependent variable is explained by the model including the two independent variables. 4. 2 A personal link to the cause has a positive effect on the intention to donate. (Hypothesis 1) Hypothesis 1 was tested with a regression analysis. This way we can determine whether a (higher) personal link to the cause also leads also to the intention to donate. The raw SPSS output will be given in Appendix 1. As indicated by the analysis, the regression reveals a positive and insignificant effect between a personal link and the intention to donate (? -. 053 p;0. 26). Therefore, we have to reject Hypothesis 1. 4. 3 A good brand personality of a non-profit organization has a positive effect on the intention to donate. (Hypothesis 2) Hypothesis 2 was also tested with a regression analysis. This way we can determine whether a good brand personality leads to an intention to donate. The raw SPSS output will be given in Appendix 1. As indi cated by the analysis, the regression reveals a positive and significant effect between a personal link and the intention to donate (? =0. 26, p;0. 001). Therefore, we Hypothesis 2 is supported. . 4 People with higher income are more likely to donate than people with lower income. (Hypothesis 3) Hypothesis 3 was tested with an independent samples t-test. The raw SPSS output is given in Appendix 1. As indicated by the t-test, people with a higher income (M=5. 11) are significantly more likely to donate than people with a lower income (M=4. 86). (p ; 0. 02). Therefore, Hypothesis 3 is supported. In table 2 a summary of this study’s hypotheses will be given as well as the results of all hypothesis-testing analyses. Table 2 Summary of hypothesis and results Hypothesis| Result| H1: A personal link to the cause has a positive effect on the intention to donate. | Not supported| H2: A good brand personality of a non-profit organization has a positive effect on the intention to donate. | Supported| H3: People with higher income are more likely to donate than people with lower income. | Supported| 5. Conclusion and Discussion 5. 1 Conclusions In this study we have discussed two different factors (a personal link to the cause and brand personality) that have an effect on the intention to donate between people with higher income and people with lower income. According to the results of our regression analysis, people who have a personal link to the cause of a non-profit organization are not more likely to donate then people who don’t have a personal link to the non-profit organization. A possible explanation for this unexpected finding is that a personal link to the cause is an important factor for these organizations, but not sufficient for people to become more likely to donate. Previous studies have shown that there is a significant difference in the intention to donate and a personal link to the cause (Sargeant ; Woodliffe 2007). A possible explanation for this unexpected finding is that there were not a lot of people in our survey who had a personal link to the cause. As we expected from our hypothesis people are indeed more likely to donate to a non profit organization with a good brand personality than to an organization with a perverse brand personality. The expected difference in the intention to donate between people with a higher income and people with a lower income was found in our analysis. According to our data, people are indeed more likely to donate when their income becomes higher. With this information we can conclude that people take their income into account when it comes to making a donation. 5. 2 Shortcomings and future research One of the shortcomings of our study lies in the fact that we might have had some multi-interpretable questions with the lack of depth because of limited preparedness. A second restriction is that our analysis might be influenced by some personal bias. It could be that people were influenced to give a social responsible answer. The third limitation is based on the fact that all our data was collected at one point at the time. If we would have found for example that people with a personal link to the cause were more likely to donate, we still could not conclude that this will always be the case; therefore you have to collect data over a longer period of time. If we sum up all shortcomings, future research on the intention to donate should focus on taking the survey separately, so that people could not influence each other and therefore not the outcome of the data. The data should be collected over a longer period of time to get a better insight if people with a higher income change their donation behavior. . 3 Theoretical implications What do we learn from this study? Was existing theory confirmed or rejected? One theoretical assumption of this research is that a personal link to the cause and brand personality would lead to a higher intention to donate. This study shows however that this is not necessarily true according to the personal link to the cause of a nonprofit organization. Moreover, this researc h has shown that a higher income would have a positive effect on the intention to donate, as we expected. 5. 4 Practical implications One of the most important implications of the results we have found is that in practice non-profit organizations should not only focus on a certain group of potential donors, but also come in contact with them through information. This way the donor will feel like a part of the organization as a whole. By letting the donors know what their future plans, initiatives and successes are. These organizations should try to find active donors who will eventually become dedicated to their cause and will donate themselves. References Smith, N. 2011, August 2), Charities ‘hit by funding cuts’ BBC News UK. Retrieved 16 November 2011 from http://www. bbc. co. uk/news/uk-politics-14366522 McKenna, T and Noble, C. (2009, March 3). Non profit Finance Fund Survey: America’s Nonprofit in danger. Non profit finance fund. 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Explaining Gendered Responses to â€Å"Help-Self† and â€Å"Help-Others† Charity Ad Appeals: The Mediating Role of World-Views. Journal of Advertising, XXIX (3), 15-28. Knowles, P. , & Gomes, R. (2010). Building Relationships with Major -Gift Donors: A Major-Gift Decision-Making, Relationship-Building Model. Journal of Nonprofit & Public Sector Marketing, 21 (4), 384-406. Sargeant, A. , & Woodliffe, L. (2007). Building Donor Loyalty: The Antecedents and Role of Commitment in the Context of Charity Giving. Journal of Nonprofit & Public Sector Marketing, 18 (2), 47-68. Venable, B. T. , Rose, G. M. , Bush, V. D. , & Gilbert, F. W. (2005). The Role of Brand Personality in Charitable Giving: An Assessment and Validation. Academy of Marketing Science, 33 (3), 295-312. White, K. , & Peloza, J. (2009). Self-Benefit Versus Other-Benefit Marketing Appeals: Their Effectiveness in Generating Charitable Support. Journal of Marketing, 73 (July), 109-124. Appendix 1. Raw SPSS Output Hypothesis 1 and Hypothesis 2 Regression Variables Entered/Removedb| Model| Variables Entered| Variables Removed| Method| 1| Mean_Brandpersonality, Mean_PersonalLinka| . | Enter| a. All requested variables entered. | b. Dependent Variable: Mean_intention| Model Summary| Model| R| R Square| Adjusted R Square| Std. Error of the Estimate| 1| ,242a| ,059| ,054| ,86641| a. Predictors: (Constant), Mean_Brandpersonality, Mean_PersonalLink| ANOVAb| Model| Sum of Squares| df| Mean Square| F| Sig. | 1| Regression| 17,971| 2| 8,985| 11,970| ,000a| | Residual| 289,004| 385| ,751| | | | Total| 306,975| 387| | | | a. Predictors: (Constant), Mean_Brandpersonality, Mean_PersonalLink| b. Dependent Variable: Mean_intention| Coefficientsa| Model| Unstandardized Coefficients| Standardized Coefficients| t| Sig. | | B| Std. Error| Beta| | | 1| (Constant)| 4,012| ,258| | 15,523| ,000| | Mean_PersonalLink| -,053| ,048| -,062| -1,122| ,263| | Mean_Brandpersonality| ,258| ,054| ,262| 4,780| ,000| Hypothesis 3 T-test Group Statistics| | What is your current income| N| Mean| Std. Deviation| Std. Error Mean| Mean_intention| >= 3| 152| 4,8618| ,90656| ,07353| | < 3| 135| 5,1136| ,89235| ,07680|