Crowdfunding Donors Show Feelings of Betrayal When Gifts Are Redirected (Study)

Charities frequently redirect charitable gifts. Sometimes a project in one location falls through and the charity spends the money in a neighboring town, for instance. A team of researchers decided to explore how donors react when their gifts are redirected.

In a series of experiments, people were given money to contribute to different projects, like a new water pump or a library in a remote village. For some donors, the money was transmitted via a crowdfunding site. For others, the money was given through donations to traditional charities. Some donors in both groups were then told their donations had been directed to other projects.

Participants who chose specific projects through a crowdfunding site had strong negative reactions when their gifts were redirected; 62 percent chose a different charity when given another chance to contribute.

Participants were much less likely to express feelings of betrayal when the money they gave to a traditional charity was redirected.

Other research found that a detailed explanation, an apology, or even offering a credit equal to the original donation did little to reduce the sense of betrayal donors felt when their gifts were redirected. What might be needed is for the charity to try to relate to the donor emotionally by saying its staff was sad that the gift wasn’t carried out as intended, says Jeff Joireman, chairman of the Department of Marketing and International Business at Washington State University, who led the research.

“Even if the redirect went to something that was really necessary and needed, the charity might want to express some disappointment that the donor didn’t have full agency over their gift,” he says.

“You Did What with My Donation?! Betrayal of Moral Mandates Increases Negative Responses to Redirected Donations to Donor-to-Recipient Charities,” by Jeff Joireman, Mark Mulder, Yany Gregoire, David Sprott, and Pavan Munaganti, was published in the Journal of the Association for Consumer Research, Vol. 5, No. 1.