Donating Time versus Money

Around the world, there are thousands of charitable and political causes seeking donations of our time and money. In a recently published Journal of Consumer Research article, John Costello and Selin Malkoc examine this intriguing and important issue. Here they share what we can learn from their findings.

Nonprofit organizations, like charities and political groups, tend to succeed or fail based on their ability to attract donations of time and money. While both resources are integral to the operation of non-profits, their managers typically prefer donations of money over time volunteered. But, donors tend to prefer the exact opposite: to donate time, even when doing so does less good for the cause they aim to help. Why is that?

We investigated this question and concluded that the answer lies with the amount of control donors feel over their donation. Money is a material resource that exists external to the self and thus once “given,” it no longer feels controllable to the donor. Time, however, is an internal resource, which means that the donor remains part of the donation, leading to greater perceptions of control. Since people inherently seek control, they also find it more desirable to donate the resource that imbues them with more control.

In one of our studies, we told participants about a fictional charity, End Hunger Today, that needed to digitally update donor information to better fundraise. Participants were also told that “it takes 2 hours [$34] for 500 contact records to be digitized” and were asked if they would be willing to donate 2 hours [$34]. We found that while 62% of the participants who were asked for time donation choose to do so, only 32% of those who were solicited for time donated. Further, this difference was driven by the higher levels of control participants felt over their donated time than money.

A follow-up study found similar results using incentive compatible measures. When asked to provide their email to obtain further information about donation or volunteering opportunities, 15% of the participants in the time condition did so. However, only 8% provided their information when they were asked for a monetary donation. Once again, we found that the amount of control felt over the donated resource explained this time/money asymmetry and did so over and above other factors like perceived effort to donate, increased connection to the donation, or feelings of warm glow.

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These findings are problematic for the non-profits who would prefer money donations over time donations. Fortunately, we also offer potential solutions. The most straightforward route is to give donors more control over money donations, for instance by telling them that they can choose the specific activities their money will support. We tested this intervention in one of our studies and found support for its effectiveness: interest in money donations increased from 51% to 74%.

While effective, however, giving control to the donors might not be feasible for charities. To address this, we tried telling participants to “spend” their money on a cause, as opposed to “giving” to it. We reasoned that the spend language would obscure the fact that donors are parting with their money. This language change worked: when participants were asked to give to a charity, on average they gave $40; but when they were asked to spend their money on a charity, this amount increased to $94.

Our results demonstrate that charities should use different strategies when soliciting time and money. Earmarking and spending frames are particularly effective for asking monetary donations, while restricting volunteering activities can backfire when soliciting time donations. At a broader level, our work challenges the assumption that donation decisions are driven by altruistic motives, and shows donations can be driven by the donor’s own psychological needs.

Read the full paper:

Journal of Consumer Research, ucac011,