MMTC extra seminar with guest Sebastian Villa Betancur (Universidad de Los Andes)

You are invited to join us for this extra MMTC seminar with guest Sebastian Villa Betancur (Universidad de Los Andes)

Seminar title: “ To Earmark or to Non-Earmark? The Role of Control, Transparency, Salience, and Warm-Glow”

Seminar description: Charities face tension when deciding whether or not to offer earmarking to donors—i.e., let donors restrict donations to a specific purpose. Research shows that earmarking decreases operational performance because it limits charities’ flexibility to use donations. However, there is also a common belief that earmarking increases donations. Earmarking is assumed to increase donations through four mechanisms: by (i) giving donors control over their donations, (ii) increasing operational transparency of donations (iii) leveraging highly salient projects, and (iv) increasing donors’ warm-glow. To resolve this tension, we study how, when, and why earmarking affects donors’ decisions. We consider three important decisions donors make that impact the fundraising outcome: preference between earmarking and non-earmarking, the decision on whether to donate or not (i.e., donor activation) and the donation amount. We design three online experiments that allow us to quantify the effect of earmarking on donors’ decisions and investigate the role of the four mechanisms in fundraising. Our results reveal that earmarking has varying effects on the three decisions donors make and does not always increase donations. Moreover, we determine the conditions under which the four mechanisms affect the outcome of fundraising campaigns. Our findings provide clear insights into how charities can design fundraising campaigns more effectively and suggest when to leverage earmarking and the four mechanisms depending on the charity’s fundraising goals.

As part of a Linnaeus Palme teaching Exchange between Universidad de Los Andes, in Colombia, and Jonkoping University in Spring 2022, Sebastian Villa Betancur - specialist in the humanitarian logistics field - will be involved in teaching and seminars activities in connection to the coming Humanitarian Logistics course at JIBS. To create an understanding of other nations' conditions to prepare and respond to crises, Sebastian will be giving seminars for other academics linking the Colombian perspective to the Humanitarian Logistics field. The seminar will be arranged within the research frame of the MMTC at JIBS.