Philanthropy scandals and regular donations: the role of email marketing communications

Abstract

ABSTRACTCharitable organisations are principled actors providing essential community services. However, due to some highly publicised charity scandals in recent years, they are under increased scrutiny today. This study explores the impact of negative publicity (i.e. publicly reported scandals) about charitable organisations on the contributions of regular donors and analyses the moderating role of email marketing communications as a key factor in counteracting the impact of negative publicity on donations. The results of analysing a sample of regular donors during the period 2013–2020 reveal that negative publicity about charities reduces the amount donated, and that this effect is stronger on the contributions of more frequent donors, who are potentially more sensitive to this publicity. This impact is softened by email marketing communications. The implications for the field of marketing management in charities are discussed.KEYWORDS: Negative publicityemail marketing communicationsregular donorsdonation frequencylongitudinal data AcknowledgmentsThe authors are members of the research group Generes (http://generes.unizar.es/es/), and they appreciate the financial support received from the projects PID2020-114874GB-I00 (MCIN/AEI), TED2021-130861A-100 (MCIN) and S54_23R (Gobierno de Aragón y Fondo Social Europeo).Disclosure statementNo potential conflict of interest was reported by the author(s).Notes1. The reported articles were about people working in charitable organisations who were denounced for, accused of, or arrested for inadequate and improper financial conduct or sexual exploitation and abuse. Specifically, we found that in 2015 there were two major scandals related to inadequate and improper financial conduct in two organisations, one medium and one large (where medium charities have a total income between approximately €1.25 M and €11.5 M and large charities have a total income of more than approximately €11.5 M; Institute of Fundraising, Citation2020); in 2018, four major scandals related to sexual exploitation and abuse involving 10 organisations (medium and large) were publicly reported; and in 2020 another large organisation was also involved in a different case of sexual exploitation and abuse. The main activity of these organisations is humanitarian assistance to improve the lives of vulnerable populations.2. The collaborating charity allows its donors to control the information flow. In the country where the organisation operates, it is required by law to obtain permission from individuals to receive email marketing communications.3. We further analysed the content of participative communications in 2018 to check whether the organisation devoted any of the activities to addressing issues related to scandals that arose in other charities during this period. As noted previously, there was a significant amount of negative publicity in 2018. However, we did not find that the content of the participative communications was related to these scandals; neither was the content of informative communications.4. As a robustness check (see the Estimation Results section for details), we also investigated an alternative model specification through an OLS regression that included donation frequency as a continuous variable. In general, the results are consistent with the main findings of the study.5. Additionally, we explored whether there were significant cancellation rates over the study period. The percentage of regular donors who cancelled their subscription in 2013 was 3.6%; for 2014, 5.3%; for 2015, 4.2%; for 2016, 1.4%; for 2017, 2.1%; for 2018, 4.4%; for 2019, 2.9%; and for 2020, 3.3%. A significant proportion of these cancellations was due to the death of some donors (who tended to be older people). The collaborating charity provided this information and, together with the empirical evidence in our data, this suggests cancellations were not largely a consequence of highly publicised scandals within the charitable sector.Additional informationFundingThis work was supported by the MCIN/AEI under Grants PID2020-114874GB-I00 and TED2021-130861A-100, and by Gobierno de Aragón y Fondo Social Europeo under Grant S54_23R.Notes on contributorsAna MinguezAna Minguez is Assistant Professor of Marketing at the University of Zaragoza, Spain. Her research interests are in the fields of prosocial and responsible behaviour, donations and relationships between donors and non-profit organisations, with particular focus on the study of internal and external factors affecting individual decision-making and the identification of strategies that promote long-term relationships. She has also published her studies in various scientific journals including Journal of Service Research, Journal of Business Research and Journal of Service Theory and Practice, among others.F. Javier SeseF. Javier Sese is Full Professor of Marketing at the University of Zaragoza, Spain. His research areas include customer value management, multichannel customer management, loyalty programmes, the customer experience, complaint management, and the engagement of individuals in sustainable and prosocial behaviours. His research has appeared in various scientific journals including Journal of the Academy of Marketing Science, Journal of Retailing, International Journal of Research in Marketing, Journal of Service Research and Journal of Interactive Marketing. He is currently Senior Editor of BRQ Business Research Quarterly, and an Editorial Board Member of Journal of Service Research.