The Influence of Social Media on Charitable Fundraising

Abstract

Charities increasingly utilize social media tools in fundraising. This research studies three mechanisms by which Facebook “likes” affect charitable behavior: (1) signaling, (2) commitment escalation, and (3) social contagion. The first study manipulates the number of Facebook likes on a page and finds support for a signaling effect of the aggregate Facebook likes on charitable intent. The second study manipulates whether the visitor clicks a Facebook like or not. Results show that the act of “liking” a fundraising page in and of itself escalates one’s charitable intent. An auction field study sells artwork created by under-privileged youth, and utilizes Facebook and Facebook likes to disseminate word of mouth about these auctions. Results show that social media increases willingness to pay (WTP) in charity auctions. The number of Facebook likes has a direct signaling effect and an indirect social contagion effect on WTP, as Facebook friends pass on information, through their likes. Consistent with the commitment escalation hypothesis, clicking a Facebook like has a direct effect on WTP.

Keywords: Social Media, Facebook Likes, Charity, Auctions

JEL Classification: D44, M31, D64, C93