A study of incentives in charitable fundraising

Purpose The purpose of this study is to determine how self-driven (intrinsic motivators) and monetary incentives (extrinsic motivators) are mediated by an effort to affect fundraising outcomes. This integration sheds light on crowding out between the two types of incentives as well the drivers of fundraising outcomes, specifically effort and donations. Design/methodology/approach A field experiment is conducted over a two-month period, involving an online fundraising campaign with over 300 volunteers assigned to one of five different incentive conditions. A special website was created to monitor fundraiser efforts. Fundraisers filled out pre- and post-study surveys. Findings While high monetary incentives result in the greatest immediate increase in funds raised, they crowd out future intentions to volunteer once incentives are withdrawn. Mediation analyzes show that fundraiser effort fully mediates the effect of intrinsic motivators and partially mediates the direct effect of extrinsic motivators on funds raised. Research limitations/implications A major limitation of field experiments is the lack of control, resulting in higher variation. However, while a more controlled experiment will reduce this variation, this goes at the expense of lower external validity. Practical implications Results indicate that – at least in the short run – monetary incentives can result in higher fundraising outcomes. However, this goes at the expense of a reduction in future volunteering once the incentives are withdrawn. Originality/value This study examines whether extrinsic or intrinsic motivators have a greater impact on funds raised and whether extrinsic motivators crowd out future intentions to volunteer. Different from previous research in which effort is a latent variable, the effort is directly observed over time.

Theory vs. Practice: Does Fiscal Policy Crowd Out Business Investment during Crises?

In 2020, the South Korean government aimed to mitigate the socio-economic impact of the COVID-19 pandemic by enacting a fiscal stimulus package worth 66.8 trillion won. Traditional economic theory warns that such deficit-financed expansionary fiscal policies can have the adverse effect of crowding out business investment, but the current literature is more divided: some argue that the crowding-out effect outweighs the multiplier effect of fiscal stimulus; some claim that the two effects cancel each other out; and others assert that the scale of crowding out is small, at least in recessions. It is important to study the existence and scale of crowding out during recessions to evaluate the soundness of fiscal policies as a countercyclical tool. Thus, this paper examines whether Korea’s fiscal policy crowded out business investment during two severe economic downturns: the “great recession” of 2008 and the “great lockdown” of 2020. The paper uses a cross-time case comparison of the two economic crises in the hopes of drawing generalizable conclusions for South Korea over time. The findings show that Korea’s facility investment continued to increase during the recent pandemic but decreased during the 2008 financial crisis. Was this due to crowding out? Further analysis suggests that the decrease in investment during the 2008 crisis was due to factors other than crowding out. Hence, the paper concludes that Korea’s fiscal responses to the two crises did not crowd out business investment and thus encourages the continued use of appropriately sized and targeted fiscal stimulus during recessions.

Co-creation: A New Pathway for Solving Dysfunctionalities in Governance Systems?

Although governance systems play a crucial role in securing an accountable public sector, they can grow overly resource demanding, cause problematic distortion of welfare tasks and crowd out motivation among employees. This study contributes to existing literature by conceptualizing co-creation as a pathway for solving dysfunctionalities in governance systems and explores the prospects of such an approach. Based on a case study of the development of a municipal supervision system, the study outlines the characteristics of co-creating governance systems. The results points to co-creation as a promising, although resource demanding, pathway for finding robust solutions to dysfunctionalities in governance systems.