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Jul 7, 2020 2020-07 Business Administration Faculty Research in Education

Interplay of impact, moral goals influences charitable giving to different causes

Charitable giving is a nearly half-trillion-dollar sector of the US economy, but what accounts for why some individuals, foundations and corporations give locally while others give to charities on the other side of the globe? According to a new paper co-written by a Gies College of Business expert in consumer behavior and global marketing, the dynamic interplay between the accessibility of local impact versus more global goals can influence charitable behaviors between donors and recipients.

An appeal to morality can persuade people to make donations that benefit recipients halfway around the world – even though those same resources could be allocated to helping those with similar needs who live closer, said Carlos Torelli, a professor of business administration and the James F. Towey Faculty Fellow at Illinois.

“Although past research suggests that people are more likely to donate money to nearby causes to maximize the positive impact on their local community, donations to foreign causes are growing rapidly,” he said. “With the rise of globalization, geographic borders are becoming less relevant for making charitable donations, which means nonprofits and charities can make more effective pitches to donors by emphasizing higher-level concepts such as morality and idealistic values.”

Torelli and his co-authors conducted five studies to identify the conditions under which donors pledge higher amounts of money to recipients who are located spatially far away versus nearby recipients, and to rule out the possibility that the effect of spatial distance is driven by unequal economic conditions and, thus, differences in need between the two recipients.

“What we found is that people who donate money to causes that aren’t local do so to feel more fulfilled, because it’s something that’s more aligned with their moral identity, which is the extent to which moral traits, goals and behaviors are important to one’s self-concept or self-identity,” said Torelli, also the executive director of Professional and Executive Education at the Gies College of Business. “We also found that this positive effect was more prevalent among people high in moral self-concept and was attenuated or even reversed among people low in moral self-concept.”

The appeal to morality in requesting donations for distant recipients is “an entirely different framework” than for requesting donations to a local cause, which should emphasize the concrete, actionable impact of a monetary donation, Torelli said.

“For local or nearby causes, you really have to push the immediate impact aspect of it – how many people you can help, how much and how quickly your dollar can be put to work for individuals who are members of the community,” he said. “The morality appeal, on the other hand, really has to tap into higher-level idealistic goals – clean water for everyone the alleviation of hunger, for example.”

The paper’s findings can help organizations increase the efficacy of marketing initiatives, Torelli said.

“The same cause can use different appeals depending on who they’re targeting and where they are,” he said. “If they're far away, then an appeal to morality is going to be more effective than an appeal to sheer numbers and impact.”

The research also has implications for for-profit organizations engaging in corporate social-responsibility initiatives.

“Many large organizations are global and choose international charitable organizations to partner with, to align their social impact with their practices and beliefs,” Torelli said. “Not only does this type of initiative have a social impact, it can also have a positive impact on employees of the organization. Our findings suggest that companies with corporate social-responsibility initiatives that help recipients in distant locations could benefit by focusing their communications on the higher-level goals that such initiatives are accomplishing instead of just touting their impact.

“Doing so might result in higher employee involvement with the charitable cause and higher employee satisfaction, particularly for employees who place a lot of importance on moral identity.”

Torelli’s co-authors are Maria A. Rodas of the University of Southern California and Alison Jing Xu of the University of Minnesota. The paper was published in the journal Organizational Behavior and Human Decision Processes.