The Effect of Monetary Rewards on Image Motivations in Charitable Giving
2020
Do monetary incentives always crowd out image motivations in pro-social behavior? The crowding-out theory from previous literature suggests that people who receive monetary rewards for their volunteering activities may be perceived as “profit-seeking” instead of altruistic by the public, and those who care about their philanthropic images are less willing to volunteer if offered a public reward. In this paper, we study the effect of different levels of monetary rewards on image motivations in the context of charitable donations. Our experiment results show that a small reward in terms of a 10% donation rebate does not impose any significant donation behavior changes, both in private and public. When a large reward is given (50% donation rebate), people’s perception of the monetary reward determines whether the reward crowds out donations. For those who believe the reward makes their donations appear “less generous”, a 50% rebate significantly crowds out charitable donations in public; for those who do not associate monetary rewards with a negative image, a high rebate significantly increases their donations in public. We also find that males, in general, are more sensitive to their public images and significantly reduce their donations in public when offered a high reward, while the effects on females are non-significant.
Recommended citation: López Vargas, K. & Zhang, R. (2020). "The Effect of Monetary Rewards on Image Motivations in Charitable Giving." Working Paper.