Charitable Giving in Nonprofit Service Associations: Identities,Incentives,and Gender Differences

Collective Goods

Collective goods are nonrival in consumption—that is, it costs nothing to let an additional person enjoy them once they are provided (Samuelson, 1954). Like many nonprofits, service clubs provide collective goods, and such provision is enshrined in their mission statements. For example, Lions Club International lists its mission as “to empower volunteers to serve their communities, meet humanitarian needs, encourage peace and promote international understanding through Lions clubs” (Lions Clubs International, n.d.). Any additional member or nonmember can benefit from the fact that Lions provide these services to others, and the addition of more consumers of this fact does not diminish the consumption of incumbents. The service club in our experiment provides access to higher education, a service collectively enjoyed by those who value others’ access to education.

A well-known problem with voluntary support for collective goods is free riding, enjoying service provision without personally contributing. This leads to underprovision of collective goods relative to the social optimum. Andreoni’s (1988, 1989) impure altruism model provides a framework that predicts the observed distribution of charitable giving and free riding. In his model, potential donors care about both the level of collective good provision (labeled “altruism”) and their personal contribution to the collective good (“warm glow”). Variation in the relative importance of these two motivations explains why some people free ride, others do not, and still others take an easy ride (less extreme free riding).

Service clubs assemble like-minded individuals to support the provision of collective goods. This reduces free riding through self-selection, repeated interactions with other members, and community enforcement (Kandori, 1992). In addition, service clubs can employ mechanisms known or thought to reduce free riding, such as devoting a portion of mandatory dues to funding collective goods or bundling warm glow with entertainment in special-event fundraisers.

Priming

Priming occurs when exposure to a stimulus influences the response to another stimulus (Samson & Miles, 2016). Molden (2014) notes the lack of a precise universally accepted definition of social priming. Most users of the term look at how priming activates various social representations (of, for example, traits, stereotypes, or goals) and consider how that activation affects subsequent behavior. The operational definition of priming has expanded to include “How cues that activate . . . the recall of specific social contexts and events alter current preferences and choices” (p. 4). Morewedge and Kahneman (2010) summarize evidence that priming works through stimulation of “associative memory,” the “network of long-term memory for semantic information, emotions and goals that is governed by the spread of activation, as determined by the strengths of interconnecting weights” (p. 435). Furthermore,

[T]he pattern of automatic activation in memory tends to produce a comprehensive and internally consistent interpretation of the present situations, which is causally embedded in the context of the recent past, and incorporates appropriate emotions and preparedness for likely future events and for future actions. (p. 436)

In our experiment, we prime subjects using a task designed to activate chains of association linked to the socializing or service benefits of membership in a service club.

Effects of Priming the Socializing Benefits of Membership

Four theories predict that subjects receiving the socializing condition will decrease, and one that they will increase donations. First, reference to the social activities of the club may activate impressions that the club is not serious in providing collective goods or services, or members’ donations may not be used to accomplish charitable purposes. This would presumably reduce their donations.

Second, the condition alters the reputational and/or image benefits of donating. One of the main reasons why people give is to maintain their self-image and reputation as good people. Extrinsic rewards, such as money, prestige, or front row seats, for prosocial acts create doubt regarding one’s true motivation, crowding out the image and reputational motivations for giving. Social psychologists Lepper, Greene, and Nisbett (1973) call this the overjustification effect, and economists Bénabou and Tirole (2006) model the problem mathematically. Several experiments confirm the empirical relevance of this phenomenon. For example, Ariely, Bracha, and Meier (2009) told subjects in a laboratory experiment that donations would be made to a charity in proportion to the distance they pedaled on a stationary bicycle. Their experimental conditions varied whether or not subjects were paid for their time on the bicycle and whether other subjects observed them cycling. Those receiving monetary payments covered less ground when observed than did those in the two unpaid conditions. However, subjects who were not observed and received monetary payments for effort covered more ground than did those in the two unpaid conditions. Field experiments by Karlan and McConnell (2014) found that these effects are due to reputational crowdout, rather than an altruistic desire to serve as a role model and thereby increase the gifts of others. In our experiment, the socializing condition could affect the reputational benefits of donating. Subjects may view the socializing condition, when the socializing benefits of club membership are emphasized, as an extrinsic reward for members that reduces the signaling value of giving. If so, donations would fall.

The closely related theory of motivational crowdout also applies. Deci (1971) labeled the feeling of satisfaction that one gets from acting as “intrinsic,” and provided evidence that intrinsic motivation is crowded out by extrinsic rewards. Applied here, socializing benefits (extrinsic) may crowd out the warm glow from giving, resulting in reduced donations.

Third, social identity theory postulates that individuals contain multiple internal identities that lead to distinct behaviors when activated (Tajfel & Turner, 1979). Akerlof and Kranton (2000) maintain that each internal identity comes with a set of socially prescribed norms of behavior. For example, cultural and social norms, although contested, suggest that Asians should be good at math and women not so good. Both identities are present in Asian women, and either identity could be activated by contextual factors. Shih, Pittinsky, and Ambady (1999) confirmed this story in an experiment, and found that Asian American women score higher on a math test when primed to identify themselves as Asian than when primed to identify as women. In the present context, subjects may enter the experiment with a “partier” identity that has norms of making friends and having fun rather than making charitable donations. The socializing condition could activate this partier identity.

The fourth theory is that the socializing condition increases generalized commitment to the club. Olson (1965) argues that clubs gain the commitment of members by providing selective material and solidary incentives. Knoke (1988) finds that an index of social incentives has a significant positive effect on an index of internal participation in professional associations. This commitment would plausibly carry over into support for the club’s charitable mission, resulting in increased donations. In light of these competing sign predictions, we offer the following null hypothesis:

Effects of Priming the Service Benefits of Membership

Two theories suggest the service condition will increase donations. First, according to social identity theory, this condition may activate a “giver” identity, with a prescribed level of giving. Second, as with the socializing condition, this condition may increase generalized member commitment to the club, resulting in increased support. Knoke (1988) found that an index that includes the goal of attempting to change nonmembers’ lives also explained internal participation. Putting it all together, we have the following additional null hypotheses:

Sequencing and Summary

First, subjects chose an organization they would like to be associated with from a list of two options. Second, subjects participated in a practice round, using a neutrally framed decision-making task. Third, subjects in the treatment groups were welcomed to membership in the fictitious Education Service Club (ESC) and completed one of the two priming tasks. Subjects in the control group skipped this step. Fourth, we read a solicitation message to all subjects and asked them to allocate their tokens. Fifth, subjects designated a real-world charity to receive their donations and filled out questionnaires. We compensated subjects privately before they left. Table 1 summarizes our procedures.

OPEN IN VIEWER

Table 1.

Experimental Design.

Treatment and condition	Group assignment	Initial selection	Organization name	Membership manipulation	Priming	Solicitation
Member, service	Member	Choose an organization	ESC	New member Welcome letter	Service dimension	Fundraising message
Member, socializing	Member	Choose an organization	ESC	New member Welcome letter	Socializing dimension	Fundraising message
Nonmember (control)	Nonmember	Choose an organization	ESA	No	None	Fundraising message

Note. ESC = Education Service Club; ESA = Education Service Association.

Design and Assignment

We used a between-subjects design, consisting of one control (no club membership) and treatments with club membership under two conditions (service vs. socializing). In total, 113 students at a Midwestern university participated in our experiment, receiving an average compensation of US$7.60. ¹ Upon arrival, subjects were asked to choose an organization they would “like to get involved with” from a list of two organizations, with a vague, one-sentence mission statement for each. One of the organizations was always the fictitious ESC (or Education Service Association [ESA] in the control group). The other was a fictitious organization, either the Society of Accounting Standards (SAS) or the Society of Warehousing Standards (SWS), randomly applied to sessions, which we intentionally described in a way that led very few subjects to make this choice. Those subjects picking ESC (ESA) continued with the experiment. The 12 subjects who chose SAS/SWS were taken to another room and completed the questionnaires but did not participate in the later stages of the experiment. We did this because the treatment specifically referred to the ESC (ESA), with some subjects assigned to membership and others to (nonmember) donor status. Because subjects stated that they would like to get involved with this organization, they are less likely to feel forced into membership or donor status by the random assignment procedure. An additional eight subjects were dropped for failure to complete the priming task as directed. ² Our final sample contained 93 subjects, with 30 assigned to the control group, 32 to treatment under the service condition, and 31 to treatment under the socializing condition.

We assigned subjects to 18 single-treatment sessions based on their availability, and each participated in the experiment only once. ³ Subjects did not know in advance which treatment they would receive, so there is no self-selection into treatment. Moreover, each treatment had multiple sessions on different days and times, so that selection based on unobservable attributes correlated with time should not be a problem. Subjects were instructed to finish their tasks independently without interacting with others during the experiment—they sat behind black paper shields without seeing others’ activities and were not allowed to talk with others.

Membership Manipulation

Following the practice round, subjects in the treatment groups were told, “You have chosen the Education Service Club, and are now being granted the membership in the Education Service Club.” The experimenter then read a new member welcome letter orally while subjects read the printed version. Those in the control group heard nothing about membership. They were told instead, “You have chosen the Education Service Association and here is more information about it.”

Priming Task

The welcome letter was used for priming. The letter included basic information about the ESC’s mission, service projects and social activities, and membership obligations. Immediately after reading the welcome letter, subjects in the service condition were asked to highlight in the letter “at least 3 phrases that are directly related to the ESC’s charitable mission,” and subjects in the socializing condition were asked to highlight “at least 3 phrases that are directly related to the ESC’s social activities.”

Four subjects completed the priming task that was not assigned to them (highlighting only the mission-related phrases) instead of the task that was assigned (highlighting the social-related activities). Our baseline results reassign these subjects to the condition they experienced (service). We check whether results are sensitive to this reassignment against the alternative of dropping the subjects (resulting in a sample size of 89) and report the differences in the “Results” section.

Decision Task

All subjects were endowed with 600 tokens, and received a short and neutral fundraising message from the ESC (or ESA in the control group). For the control group, the fundraising message, which was only four sentences long, introduced the charity’s mission and its scholarship fund, and then requested donations by asking, “Please make a donation to the ESA Scholarship Fund.” The message also stated, “100% of your donation will benefit students because an anonymous donor is covering all of the administration and fundraising costs associated with this campaign” in an effort to remove heterogeneity resulting from subjects making diverse assumptions about these matters. The message for the treatment groups was identical, except that the organization was called ESC and the charity’s mission statement was omitted (as it was presented already in the new member welcome letter). The message was read aloud to subjects by the experimenters.

Next, we asked subjects to complete the allocation task, that is, to divide their endowment between a personal account and the scholarship fund. They were told,

At the end of each session, tokens are converted to real money at the rate of 100 tokens to $1. Your token donations will become real donations to a scholarship fund you will choose from a list of real-world charities. ⁴

The money that a subject kept for herself was added to her US$5 show-up fee to determine her monetary compensation. We presented subjects with multiple examples and the opportunity to ask questions in an effort to minimize misunderstandings and miscalculations. Then, subjects were told to “place the tokens you wish to keep for yourself in the envelope labeled ‘Personal Account,’ and place the tokens you wish to donate in the envelope labeled ‘Charity.’” To preserve anonymity, subjects sealed the envelopes and handed them to an assistant who relayed them to a second assistant in another room for processing.

Questionnaires

Subjects completed questionnaires post treatment. The first was a psychometric scale designed to check whether those in the treatment group identified as ESC members, adopted from Ellemers, Spears, and Doosje (1997). ⁵ The second contained 14 questions used to construct the Empathic Concern (EC) and Perspective Taking (PT) scales (Davis, 1983). The EC and PT scales, respectively, allow us to control for individual differences in the level of dispositional empathy with unfortunate others and tendency to spontaneously adopt others’ psychological point of view.

Then, subjects completed the Unlikely Virtues (UV) scale (Patrick, Curtin, & Tellegen, 2002), which allowed us to control for social-desirability bias. Although anonymity was guaranteed and explained to subjects, this scale serves as an additional check for subjects who do not understand or trust the anonymity procedure. The UV scale is the sum of “true” responses to 14 true–false items that describe socially desirable behaviors that are rarely true, such as “My opinions are always completely reasonable” or “I have never felt that I was better than someone else.”

Finally, a sociodemographic questionnaire asks about subjects’ basic sociodemographic characteristics, including gender, age, ethnicity and race, educational level, academic major, marital and parental status, and frequency of religious activities. In addition, subjects were asked whether they had made donations to any charities before, and if they have/had membership in any public service clubs. Table 2 provides summary statistics for those variables employed here.

OPEN IN VIEWER

Table 2.

Summary Statistics.

Variables	All		Women		Men
	N	M	N	M	N	M
EC	91	22.02	59	23.56***	32	19.19***
PT	91	19.33	59	19.53	32	18.97
EC and PT combined	91	41.35	59	43.08**	32	38.16**
UV	89	2.04	58	2.08	31	1.97
	N	%	N	%	N	%
Major
Economics/business/engineering	30	32.97	13	22.03**	17	53.12**
Philanthropic studies/social work/nursing	20	21.98	17	28.81*	3	9.38*
Other	41	45.05	29	49.15	12	37.50
Membership in any service clubs
No	45	50.56	29	50.00	16	51.61
Yes/not now, but used to	44	49.44	29	50.00	15	48.39

Note. EC = empathic concern; PT = perspective taking; UV = unlikely virtue.

*

p < .05. **p < .01. ***p < .001 for the test of equality of means or proportions between genders.

Gender Effects

The finding that all treatment effects are restricted to females in our sample was surprising and intriguing. Taken at face value, it has the interesting implication that the service club model, combining social and service benefits, works less well than it used to when service club membership was restricted to males. We would not go so far without additional experiments specifically designed to uncover gender interactions. Among other problems, we had only 32 males in our present sample, leading to larger standard errors for estimated effect size.

Studies on the effect of gender on giving obtain contradictory results, depending on the charitable cause and numerous other details. In our context, providing educational aid to the needy, we are not surprised to note that male subjects generally gave less than female subjects did (although men gave slightly larger average gifts than women within the socializing condition). This could be due to the observed gender difference in empathic concern and perspective taking. Willer, Wimer, and Owens (2015) studied men’s and women’s intent to give and intent to volunteer for a fictional poverty relief agency, arguably similar to our ESC/ESA in its goal to help the needy. Men gave significantly less than women did, but the difference shrank and lost statistical significance after controlling for dispositional empathy.

Our problem is to explain the difference in response to conditions, not the level of giving. Noting that results from some studies of gender-linked treatment effects contradict results from other studies, Croson and Gneezy (2009) explain,

We believe that the cause of these conflicting results is that women are more sensitive to cues in the experimental context than are men . . . Small differences in experimental design and implementation will thus have larger impacts on female participants than on male participants. (p. 16)

Two studies suggest that there are gender differences in how extrinsic incentives affect the self-image motivation for giving. Mellström and Johannesson (2008) found that women, but not men, reacted negatively to payments for blood in their experiment. Willer et al. (2015) found that men and women reacted differently to a condition that framed the poverty problem as harmful to all Americans. Men intended to give or volunteer more in this “aligned self-interest” frame (significantly so for giving), while women intended to give or volunteer less (significantly so for volunteering). They speculate that women, and those with higher levels of dispositional empathy, value acts that reinforce their self-image as altruistic people. Reminding these people of their self-interest makes it more difficult to attribute charitable acts to altruism.

Service Versus Control

The second hypothesis is really a joint hypothesis. The control and service condition groups differ in two ways: The latter is welcomed into membership and performed the service-priming task. We have discussed why the priming task might affect behavior, but membership status can have an independent effect. Subjects who are members presumably feel more responsible and committed to the success of the organization.

When nonmembers are asked to give (our control group), they learn of the organization’s mission from the solicitation message they receive. This may activate the same cognitive networks of associations as the service condition. If so, it is not surprising that we found no difference in average donations across the two groups. In terms of social identity theory, our results suggest that there are not two distinct identities—“philanthropist” and “member philanthropist”—in play.

Taken at face value, our result suggests that membership organizations are no better at securing donations than nonmember charities—at worst, the membership structure hurts donations (if the negative effect of socializing is present), at best it does not help (using service stimuli). However, our experimental setting removes some of the factors that may make service stimuli more effective for members than nonmembers. In our experiment, members interact through participation in a collective goods treatment only once, and there are no dues or other mechanisms for reducing free riding. Self-selection also matters in ways not captured by our protocol. Clark and Wilson (1961) discuss three broad categories of incentives used to increase donations—material, solidary, and purposive. Material incentives are tangible benefits with a monetary value, like savings on car rentals. Solidary incentives are intangible rewards “derived from the act of associating” (p. 134), including socializing, having fun, providing a sense of belonging, and sometimes obtaining elite status. Purposive incentives are intangible rewards associated with the goals and values of organizations. Although service clubs offer all the three types of incentives, Clark and Wilson argue that they primarily rely on solidary incentives. This attracts members more responsive to solidary than purposive and material benefits. In contrast, nonprofit organizations without members rely more on purposive incentives, attracting donors who are more motivated by service. Hence, membership has an effect mediated through selection of those more responsive to solidary benefits.

It would be useful to separate the effect of membership per se from the effect of the service prime. This would allow the analyst to answer the question “Which organizational form collects more donations: contributor- or membership-based? A purposive or a solidary group?” We could not do so in our experiment because of loss of experimental control. The membership letter contains the information used in both priming tasks. If we added a second control group, it is possible that some members would pay attention to the socializing stimuli and some to the service stimuli contained in the letter. Then, unidentifiable treatment effects would confound results from what was intended as a control group.

Practical Implications

At face value, our results suggest that service clubs and giving circles should be careful about marketing the social aspects of membership. However, before we would want to make claims about practice, we would want to know the mechanisms behind our effects. Suppose, for example, that (a) socializing increases member commitment to the cause, and hence donations but (b) socializing also sends the message that the club is not serious about service, reducing donations and (c) the second effect is bigger than the first and (d) neither the reputation and image motivations nor social identities affect donations. Then, we would expect that donations are lower in the socializing condition. However, real-world service clubs can emphasize socializing benefits, and prove that they are serious about providing charitable services in other ways through their actions and marketing. They would overcome the negative effect of socializing, allowing the positive effect to dominate. The implication is different if social identity or reputation/image/motivational-crowdout concerns were behind the negative effects of socializing. Real-world service clubs have no obvious strategies to overcome these effects.

Unfortunately, our experimental design does not allow us to test the relative importance of these (nonrival) mechanisms toward explaining our findings on the first and third hypotheses. To assess the importance of quality signaling, future researchers could include questions about the perceived effectiveness of the service effort, delivered post treatment. That would enable them to reveal whether the socializing condition affected beliefs about efficacy. To assess the importance of social identity mechanisms, future researchers would need to develop new psychometric scales designed to measure the relative salience of alternative hypothesized identities. To assess the importance of reputation and image effects, researchers would need to determine whether the social benefits of membership are perceived as intrinsic, extrinsic, or altogether different from both. A better approach would be to develop a psychometric scale designed to assess the salience of these benefits. Many scales exist that get particular benefits in particular contexts (e.g., Ko, Rhee, Walker, & Lee, 2014), but we have not located a suitable existing scale for the service club setting.