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EMAC 2024 Annual


The Impact of Donation Utilization Frequency on Recurring Giving
(A2024-119561)

Published: May 28, 2024

AUTHORS

Hanife Armut, Koc University; Nazli Gurdamar-Okutur, Koc University; Zeynep Gürhan-Canli, Koç University

ABSTRACT

Non-profit organizations aim to increase recurring donations as long-term giving is crucial in mitigating fluctuations in individual contributions. When soliciting repeat giving, charities vary in how they communicate the utilization of recurring donations and specifically, whether they utilize it in an ongoing or repeated manner. Some charities employ messages in which they do not explicitly state whether or how they utilize the donated funds on an ongoing basis (e.g., using donations to prepare for a crisis, named as one-time utilization). Alternatively, some other charities explicitly mention in their appeals the repeat utilization of donations to offer continuous help to recipients (e.g., providing help each month; termed as ongoing utilization). We show that ongoing (versus one-time) utilization of donated funds is more effective in promoting recurring donations. Further, findings suggest that ongoing utilization strengthens the cost-benefit coupling, hence reducing pain of payment, which ultimately increases recurring giving.