PULLMAN, Wash., July 5 -- Washington State University issued the following news release:
One way to boost charitable donations is to give people a choice about how their money will be spent. One way to incur the wrath of donors is to use their money for something - or anything - else.
Mark Mulder, a WSU Ph.
D. candidate in marketing, said the Internet and social networks have helped boost the popularity of so-called person-to-person philanthropy. But that giving model comes with significant risks.
Disappointing a customer, also known as a service failure, is a problem for any business, Mulder said. The literature is replete with research on service failures in the airline industry, food service or retail sales.
In those and other industries, he said, an apology and a promise to "make things right" - with a flight voucher, perhaps, or a free meal - often can forestall negative reactions, such as posting a critical review online or complaining loudly to whoever will listen.
CHANGES UPSET DONORS
In a paper Mulder delivered this spring at the Marketing and Public Policy Conference of the American Marketing Association, he said research collected over the past two years shows that donors expect their money to be used the way they specified, period.
Posting a disclaimer on the site explaining the money might be used for a different purpose doesn't work; apologizing doesn't work; offering a refund or credit doesn't work; giving the donor a chance to choose another project doesn't work.
"We found it didn't matter whether the same project was completed in a different village, or the same village benefitted from a different project, or both a project and village changed," he said. "Any change was upsetting to the donor."
COMPLAINTS HARM ORGANIZATIONS
Mulder has plans to do more extensive research on the topic, but his preliminary work suggests that when donors learn their money has been used for other purposes, not only are they more likely to stop giving, but they are also much more likely to share their complaints.
Just ask Greg Mortenson, author of "Three Cups of Tea," and executive director of the Central Asia Institute.
Going on TV's "60 Minutes" news program to criticize the charity's executive director, as author Jon Krakauer did after losing faith with Mortensen and the Central Asia Institute, isn't an option for most unhappy donors. But even anonymous complaints posted online can harm an organization's reputation.
STUFF HAPPENS
While there are situations where a charity is purposefully vague about where the money is going, or where donors are intentionally misled, Mulder is primarily interested in the fallout that occurs when an organization sets up an explicit relationship between a donor and a project and then - for lack of a better phrase - stuff happens.
Stuff can happen which may be beyond the control of the charity, Mulder said.
Maybe the person pictured on the website who needed a goat has a family emergency and leaves the area. Maybe the community that requested school supplies suffers a drought and needs a deeper well instead. Maybe the original project had a significant challenge that only became apparent after the appeal was posted.
The circumstances surrounding a service failure don't appear to matter to the donor, Mulder said. The donor-charity relationship suffers regardless.
FUTURE INQUIRY
Mulder continues to conduct research related to charities for his dissertation. Future studies will look at how charities use events as fundraisers and how donors respond to different pairings of events and charitable causes. Mulder's dissertation committee includes Jeff Joireman (marketing), David Sprott (marketing), Craig Parks (psychology) and Yany Gregoire (HEC Montreal). For any query with respect to this article or any other content requirement, please contact Editor at htsyndication@hindustantimes.com
Hope Belli Tinney, 509/335-8741, hopebt@wsu.edu.
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