RUI: In-Kind Giving: Motives, Beliefs, and Behaviors

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Charities receive significant amounts of non-cash donations (in-kind donations) even though cash donations would be more efficient since non-cash donations involve significant inventory and storage cost, and possibly damages and loss in value over time. Relatively little is known about why people give, and charities accept in-kind donations. This research project will use economic theory and experimental methods to study the motives, beliefs, and behavior as to why donors give and charities accept in-kind donations. Understanding the motives and beliefs behind in-kind giving is important because a significant amount of giving occurs as in-kind donations. Second, understanding why people give, and charities accept in-kind giving will allow inefficiencies in in-kind giving to be addressed with well-designed interventions. The results of this research will contribute to improve efficiency in charitable giving and increase the prosperity and welfare of the country by providing inputs into policies to increase efficiency in charitable donations. By benefiting charities, the research results further benefit donors, recipients of charity services, and local communities. The results will also help establish the US as the global leader in improving the efficiency of charitable giving.This project develops a theoretical framework to study charity and donor behavior. It proposes a two-part study to investigate charity and donor motivation, beliefs, and behavior regarding in-kind gifts: a telephone survey of charities, and a suite of laboratory human subject experiments to learn about donors. The theoretical model, charity survey, and laboratory experiments will identify factors associated with in-kind giving and advance understanding of the micro-foundations of behavior and the science of generosity. The theoretical model and experiment include a charity with multiple inputs compared to past studies that either omit a charity or focus only on overhead cost. The charity survey will provide insights into charities’ production functions and how charities assess and influence donor behavior. The laboratory experiments will test whether the ability to give in kind affects overall giving as well as test four key explanations for the prevalence of in kind gifts: preferences, information, and beliefs, overhead and waste, and mistrust combined with moral wiggle room. The results will provide new insights into the complex interacting effects of preferences, beliefs, and information on generosity. The results will also have direct implications for theoretically related phenomena, including social preferences and individual decision making, volunteering, restricted cash gifts, and donor demand for control. The results of this research will also help establish the US as the global leader in improving the efficiency of charitable giving.This award reflects NSF's statutory mission and has been deemed worthy of support through evaluation using the Foundation's intellectual merit and broader impacts review criteria.