Imagine donating money to a charity like the Red Cross: Your money can usually end up in many different of the charity’s projects. What would happen, however, if the charity allowed you to earmark your donation – that is, let you choose which project shall receive your money? Martin Schreier, Professor and Chair of WU’s Institute for Marketing-Management, Christoph Fuchs at the Technical University Munich, and Martijn de Jong, Erasmus University Rotterdam, address exactly this question in a recent publication.

Their paper, “Earmarking donations to charity: Cross-cultural evidence on its appeal to donors across 25 countries” (published in the Journal Management Science) looks at how earmarking affects donations, using a randomized survey experiment with 7,383 potential donors in 25 countries. Indeed, offering the opportunity to earmark increases donations – both because it makes potential donors more likely to donate, and because they subsequently give more on average.

However, this effect differs significantly across countries: The earmarking option seems to have less appeal in countries with cultures that are a) lower versus higher on autonomy versus embeddedness (e.g., India and Singapore show smaller effects than Germany and Sweden); and b) that are lower versus higher on egalitarianism versus hierarchy (e.g., Thailand and Bulgaria show smaller effects than the UK and the United States). Given that many charities operate internationally, these insights enable them to implement earmarking where it makes the biggest impact.

Cite as: Fuchs C, de Jong MG, Schreier M (2020) Earmarking donations to charity: Cross-cultural evidence on its appeal to donors across 25 countries. Management Sci., 66(10): 4820-4842.

https://pubsonline.informs.org/doi/abs/10.1287/mnsc.2019.3397