Introduction

Nonprofit organizations (NPOs) depend heavily on the active role of volunteers who serve as donors of effort, money, or even more tangible items such as blood. Understandably, the donors’ active part in the value co-creation process of a charitable organization’s services requires high levels of involvement (Vargo and Lusch 2004). Donor involvement, however, depends on a close identification with an NPO’s cause and relies on the perception of the NPO’s trustworthiness (e.g., Bhattacharya and Sen 2003; Lichtenstein et al. 2004). One of the most important instruments through which NPOs convey trustworthiness is a brand personality that appeals to donors (Hou et al. 2009; Faircloth 2005). Because donors often rely on NPO brands as trust-related cues in the context of social exchanges with nonprofit organizations (Sargeant et al. 2008b; Tapp 1996; Venable et al. 2005), a positive brand perception is indeed a necessary condition for an NPO to be part of a donor’s consideration set (Tapp et al. 1999).

Nevertheless, it is important for NPOs to understand how the positive effect of brand personality on the intention to donate may be affected by other marketing instruments. Competition with respect to the acquisition and retention of donors has forced NPOs to intensify their marketing efforts (Naskrent and Siebelt 2011). Specifically, monetary incentives have become an essential part of NPOs’ marketing practices and are used to enhance donors’ intention to continuously engage in the provision of charitable service (e.g., European Blood Alliance 2009). Providing monetary incentives is known to have ambiguous effects in the nonprofit context: of course, monetary incentives motivate donors to engage in a charitable service. However, negative implications might be that such incentives may crowd out intrinsic donation motives (Gneezy and Rustichini 2000a, b; Mellstrom and Johannesson 2008). Most importantly, monetary incentives affect donors’ perceptions by turning social markets into monetary markets (e.g., Heyman and Ariely 2004). Consequently, the question arises as to how monetary incentives affect the positive influence of NPO brand personality and its positive effect on donation intention.

We build on social exchange theory (Emerson 1976) and use the NPO-specific brand personality scale (Venable et al. 2005) to investigate the interaction effects of monetary incentives and brand personality on the intention to donate (Study 1). The results indicate that monetary incentives indeed negatively influence the positive effects of brand personality. In Study 2, we analyze whether the identified negative interaction depends on how trustworthy the donors’ perceive an NPO to be. Both studies are situated in the blood donation context. We find that the donors’ trust perception does have a significant effect: whereas the negative interaction is stronger for highly trusted NPO services, NPO services with low levels of trust may actually benefit from monetary incentives.

This study makes two central contributions. First, we expand the emerging literature on the branding of NPO services. While existing empirical research has focused primarily on investigating NPOs’ brand personality structure (e.g., Sargeant et al. 2008b; Venable et al. 2005) or the established link between brand personality dimensions and donation intention (Hou et al. 2009), we go a step further and examine the effect of monetary incentives on this established link. Our findings show that the incentivizing strategies of NPO services may lead to drawbacks of positive brand personality effects. Second, we show that managerial decisions on branding and incentivizing strategies should not be made independently. Depending on the perceived level of trust, the results vary substantially because monetary incentives could either harm the positive effect of brand personality or enhance it.

Monetary Incentives, Brand Personality, and Pro-social Behavior

Motives for pro-social engagement have generated wide interest in the literature and can be classified into three categories: intrinsic motivation, image motivation, and extrinsic motivation. According to theories of pro-social preferences (Ariely et al. 2009), intrinsic motivation for pro-social behavior is related to the value of giving per se, which is represented by a preference for others’ well-being, such as pure altruism (Rose-Ackerman 1996), other forms of pro-social preferences, such as warm glow (Andreoni 1990), or personal norms, such as moral identity (Winterich et al. 2013a, b; Winterich and Zhang 2014). While image motivation is fueled by the desire to be liked by others, to gain social approval, and to signal a positive image by donation behavior (Ariely et al. 2009), extrinsic motivation emanates from material rewards that are associated with giving, such as thank-you gestures or monetary incentives (Fuster and Meier 2010; Winterich et al. 2013a).

With respect to extrinsic motivational triggers, previous research has focused particularly on the moderating effect of monetary incentives on the relationship between other motives and pro-social behavior. According to standard economic theory, offering monetary incentives makes incentivized behavior more attractive (direct price effect) and adds extrinsic value to the intrinsic motivation of individuals (Gneezy et al. 2011). However, existing studies find ambiguous results regarding the overall effect of monetary incentives on the intention to donate. While some results indicate that monetary incentives enhance individuals’ probability to donate blood (Lacetera et al. 2014), other studies show that a person’s motivation to engage in pro-social behavior diminishes (Deci et al. 1999). From Titmuss’ (1970) seminal work on whether explicit incentives should be used to encourage blood donations, several studies found that monetary incentives have a detrimental effect on pro-social behavior in general. A number of reasons have been offered for this negative effect: according to cognitive evaluation theory, monetary incentives undermine intrinsic motivation (see Deci and Ryan 1985). Similarly, the attribution theory suggests that rewarding people for an activity leads them to attribute their behavior to an extrinsic incentive rather than to intrinsic motives, leading to lower intrinsic motivation (Lepper et al. 1973). A further explanation is that monetary incentives interact negatively with the social motivation of donors by diluting the signal motivation of their pro-social behavior (Ariely et al. 2009). Additionally, monetary incentives have been found to change the nature of pro-social decisions from a social exchange toward a monetary exchange, affecting social norms for pro-social contribution that could lead to a reduction of an individual’s willingness to donate (Heyman and Ariely 2004).

While the effect of monetary incentives on motivation and pro-social behavior has already been established, no research exists on the impact of monetary incentives on the brand personality of NPOs and, ultimately, donation behavior. This is peculiar because NPO branding has become increasingly relevant in the face of an intensifying competitive landscape, and research has already established a link between brand personality and pro-social behavior. Typically, NPOs serve as intermediaries between donors and receivers, and because donors have limited control over how an NPO will use a donation, trust is essential for donors to build a relationship with an NPO. Thus, donors are forced to use trust signals to evaluate the quality of NPOs (Sargeant et al. 2008b; Tapp 1996; Venable et al. 2005). Individuals often rely on a brand to evaluate an NPO’s trustworthiness and reduce uncertainty (Aaker et al. 2004). As a consequence, NPOs need to develop brand personalities that support donors’ perception of trust toward the NPO (Grohmann 2009). Defined as ‘the set of human characteristics that are associated with a brand’ (Aaker 1997, p. 347), brand personality is shown to have a positive influence on various success metrics for companies, such as consumer relationship strength (Aaker et al. 2004), brand affect and brand trust (Sung and Kim 2010), or brand loyalty (Brakus et al. 2009).

Considering brand personality’s psychological effects, monetary incentives might—analogous to the described impact on motivation—also exert influence on brand personality. This possibility should hold especially in the context of pro-social behavior and NPOs because donations differ substantially from monetary exchanges according to the social exchange theory (Bagozzi 1975; Heyman and Ariely 2004). Unlike monetary exchanges, social exchanges through which individuals help others by donating blood or organs, for example, are primarily fueled by trust toward the partnering organization (Moorman et al. 1992, p. 82). In social markets, brand personality plays an important role in how donors evaluate NPOs and, consequently, their intention to donate to a specific NPO (Hou et al. 2009; Faircloth 2005).

Considering the pro-social characteristics of NPO services, Venable et al. (2005) identified four relevant brand personality dimensions for NPOs: honesty, reputability, and trust (subsumed in the dimension integrity); goal orientation and robustness (ruggedness); a loving and caring nature (nurturance); and characteristics related to glamor (sophistication). Two of the four dimensions (sophistication and ruggedness) are similar to those defined by Aaker (1997). The relevance of trust and social exchange to an NPO’s brand personality, however, is expressed in the two new dimensions, integrity and nurturance, which are specific for NPOs. The integrity dimension is especially important for NPO evaluation as it reflects the importance of trust, commitment, and reliability as well as the positive influence of NPOs on their communities (Venable et al. 2005). In the same vein, donations relate to pro-social aspects and are hence closely associated with NPO characteristics (of loving and caring), which are reflected in the nurturance dimension.

To encourage donations in social markets, NPOs’ efforts to develop brand personalities should especially aim to convey trust. Consequently, NPOs should abstain from employing marketing instruments that might interfere with or compromise the nature of the social exchange. Nonetheless, NPOs continue to provide donors with monetary incentives to increase donations. Research on how monetary incentives change the decision framing of (potential) donors from social to monetary exchanges suggests that providing donors with monetary incentives may affect their perception of the NPO brand (Heyman and Ariely 2004) by altering the pro-social nature of the donation and attenuating the positive effect of an NPO’s brand personality. However, this relationship has not yet been investigated. This study addresses this research gap by analyzing the interrelations of incentives and brand personality and their effect on the intention to donate based on the social exchange theory.

Study 1

Hypotheses

As mentioned above, brand personality is an essential cue that is used by donors to evaluate NPOs that positively affects their intention to donate (Hou et al. 2009; Faircloth 2005). Consequently, a brand personality that focuses on integrity and nurturance is expected to enhance donors’ intention to engage with a specific NPO (Venable et al. 2005). Although monetary incentives are also expected to enhance the intention to donate (Gneezy et al. 2011), little knowledge exists on the interaction of monetary incentives and brand personality.

For example, potential donors may feel disturbed if an organization that they consider to be not-for-profit offers them money for their donation. Putting a price tag on an act of charity might diminish the donors’ feelings about the donation and their self-perception and could then reflect on how the donors perceive the NPO. In other words, offering donors monetary incentives changes the nature of the donation from being a social to being a monetary exchange (Heyman and Ariely 2004). Indeed, previous studies show that the framing of a decision situation critically influences pro-social behavior (Gneezy et al. 2011). Specifically, moving from no incentive to a positive incentive can shift an individuals’ decision frame from social to monetary (Heyman and Ariely 2004). In addition, monetary incentives also seem to change social norms, making free riding more acceptable (Fuster and Meier 2010). Consequently, by changing the framing of giving from social to monetary, we expect monetary incentives to also change the impact of brand personality dimensions that are especially related to the pro-social nature of giving.

Whereas the impact of the brand personality dimensions sophistication and ruggedness—which are also found in the commercial context—do not change with the nature of exchanges, we expect monetary incentives to influence, in particular, the effect of the NPO-specific dimensions of brand personality. In a monetary decision framework, individuals’ decisions to donate would be primarily motivated by the monetary incentive, and the pro-social brand personality dimensions such as integrity and nurturance are less relevant for donation intention (Venable et al. 2005). Offering monetary incentives will consequently lower the influence of these brand personality dimensions on the intention to donate. Hence, we propose the following hypotheses:

H1a

Monetary incentives attenuate the effect of the brand personality dimension integrity on the intention to donate.

H1b

Monetary incentives attenuate the effect of the brand personality dimension nurturance on the intention to donate.

Method

A total of 111 adults (57 % female, 39.6 years) completed the online study. The participants were members of a survey panel in Germany run by a professional market research firm. Of all of the participants, 77 % reported that they were employed. Each person was randomly assigned to one of two experimental incentive treatments (monetary incentive vs. no incentive) using a between-subject design. We used a scenario technique in which participants were asked to imagine that they are approached by an employee of a well-known nonprofit blood donation service (100 % recognition) on their way to work (see Appendix: Experimental Stimuli used in Study 1).Footnote 1 The employee informs the respondents about the relevance of blood donation and asks them whether they would be willing to donate blood, offering either a monetary incentive or no incentive. The monetary incentive was specified to be €20 in cash, which corresponds to the amount that is generally offered by hospitals or for-profit blood donation organizations in Germany. After the experimental stimulus, the participants stated their intention to donate and provided brand personality evaluations for the nonprofit organization. Finally, they reported demographic information.

We based the questionnaire on existing scales, following standard procedures for scale development (Gerbing and Anderson 1988; Rossiter 2002). As the dependent variable, we captured the intention to donate using a single-item measure (Lemmens et al. 2009). The focal construct, brand personality, was measured using multi-item constructs based on the scale from Venable et al. (2005), which consists of four dimensions (integrity, nurturance, ruggedness, and sophistication; the complete list of items, including descriptive statistics, can be found in Appendix: Description of Measures). In addition, we controlled for past behavior as well as socio-demographic variables. We used an indicator variable for the monetary incentive treatment to measure the relative effect compared to the no incentive treatment.

Regarding measurement reliability and validity, the results indicate acceptable psychometric properties for all constructs. The alpha values range between 0.73 and 0.95, and the explained variance ranged between 0.56 and 0.87 (see Appendix: Correlations). We find no issues regarding discriminant validity (Fornell and Larcker 1981).

To analyze the interaction effect between monetary and non-monetary incentives and brand personality dimensions on the intention to donate, we estimated linear regression models with robust standard errors to rule out possible heteroscedasticity issues. As the brand personality dimensions are not independent, we estimated four separate models that test moderating effects for each dimension to avoid collinearity issues (see correlations in Appendix: Correlations). The focal independent variables are the brand personality dimensions, the incentive treatment, and their interaction effects. H1a and H1b were measured by means of the interaction effects between integrity (nurturance) and monetary incentives. The measures for the brand personality dimensions and monetary incentives are mean centered for ease of interpretation.

Results

Table 1 displays the regression results. Overall, the r-squares above 0.30 show an acceptable fit. Interestingly, with respect to the main effects of brand personality, we find that the two NPO-specific dimensions integrity (0.621; p < 0.05) and nurturance (0.507; p < 0.05) significantly affect the intention to donate. The results demonstrate that both dimensions indeed reflect the loving and caring nature of NPOs, testify to the pro-social nature of donations, and serve as a trust signal for NPOs affecting donors’ propensity to support them. The results confirm that from a donor’s perspective, the aspects related to honesty, reliability (integrity), and social exchange nature (nurturance) are crucial for evaluating NPO brand personality and drive the intention to donate to an NPO. Monetary incentives also exert a positive effect on donation intention, which is consistently significant across all four models (p < 0.05). This result is consistent with findings from previous studies that show that monetary incentives add extrinsic value to individuals’ intrinsic motivation and positively influence their target behavior (e.g., Gneezy et al. 2011).

Table 1 Effects of monetary incentives and brand personality dimensions on the intention to donate
Full size table

Supporting H1a and H1b, we find negative interaction effects of monetary incentives with integrity (−1.046; p < 0.05) and nurturance (−0.700; p < 0.10). Consistent with our theoretical argumentation, the results indicate that monetary incentives impair the positive direct effects of integrity and nurturance. Obviously, the change in the nature of the exchanges have no effect on the remaining two dimensions, sophistication and ruggedness, for which we do not find significant interaction effects.

The effects of the control variables are plausible in terms of size and significance. Former donors are also more willing to donate blood in the future (Lemmens et al. 2005; Oswalt and Napoliello 1974). We also find that the intention to donate is higher for younger and employed respondents. Both findings are consistent with previous studies that showed that donors are primarily middle-aged (e.g., Piliavin 1990), with older segments being underrepresented (Misje et al. 2005). Similar to Misje et al. (2005), we did not observe gender-specific effects.

Overall, the results indicate that monetary incentives indeed change the nature of donations from (trust-based) social exchanges to (transaction-based) monetary exchanges and thus attenuate the positive effects of NPO-specific brand personality dimensions on the intention to donate. Given the heterogeneity of NPOs with respect to perceived trust (Heyman and Ariely 2004), the effects of monetary incentives may nevertheless vary depending on how trustworthy an NPO brand is perceived to be. Therefore, we tested whether different brand personality profiles with respect to perceived trust toward an NPO influence the interaction of monetary incentives and brand personality found in Study 1.

Study 2

Hypotheses

To test whether the results from Study 1 hold for different levels of trust toward an NPO brand, we conducted a second experiment. As shown above, the NPO brand serves as a major cue for donors, signaling the trust-related brand personality dimensions of integrity and nurturance. Whereas Study 1 implies a constant level of trust, it might well be that the effect of monetary incentives differs with the level of trust in an NPO. Specifically, we expect the influence of monetary incentives to differ between highly and less-trusted NPOs.

Considering that positive information (public relations, e.g., about an NPO’s successful beneficial projects) as well as negative information (e.g., about an NPO’s inefficient management, high salaries of employees, or embezzlement of donations) is readily available, it is reasonable to assume that NPOs differ with respect to how trustworthy they are perceived to be by potential donors. In the case of negative information, donors would certainly be rather unconvinced of an NPO’s integrity and nurturance, would not be surprised if the NPO behaved opportunistically, and would thus adapt their behavior accordingly (Venable et al. 2005). If this type of NPO offered money for a donation, we would expect donors to accept the money more readily because the monetary incentives could be perceived as ‘more just’ and consistent with their reciprocal expectation of monetary exchange (Fiske 1992). Obviously, money would change the nature of a donation from being a social to being a monetary exchange, but we would expect the marginal change of the brand personality effects to be rather small.

In contrast, highly trusted NPOs are associated with high expectations from donors regarding their integrity and nurturance. If monetary incentives change the nature of donations from social to monetary exchanges, the brand personality effects would lose their influence (as shown in Study 1). Compared to the low trust condition, however, the marginal change is expected to be much higher, and the negative interaction effects between monetary incentives and brand personality dimensions will hence be stronger. Indeed, monetary incentives are shown to lead to crowding out of voluntary behavior, especially in trustful relationships (Gneezy et al. 2011; Fehr and List 2004). Past research suggests that extrinsic incentives might destroy trust in a principal–agent relationship (Fehr and Falk 2002; Falk and Kosfeld 2006). According to these studies, agents may perceive monetary incentives as a signal of control or distrust and react negatively to them. Based on these findings, we expect the negative interaction of monetary incentives and brand personality dimensions to backfire, especially in cases of highly trusted NPOs. The negative interaction is especially relevant for brand personalities that are related to a trustful relationship, i.e., integrity and nurturance. Thus, we hypothesize the following:

H2a

Trust amplifies the negative interaction between the NPO brand personality dimension integrity and monetary incentives, such that high trust results in a stronger interaction effect.

H2b

Trust amplifies the negative interaction between the NPO brand personality dimension nurturance and monetary incentives, such that high trust results in a stronger interaction effect.

Method

We conducted an experimental study (Study 2) with a 2 × 2 between-subject experimental design that varies the level of trust (high/low) and incentives (monetary/none). We manipulated the level of NPO brand trust by providing information about an NPO brand in the form of an editorial news piece (Kotler and Keller 2011) that appeared to be objective and unbiased. The trust treatments consist of newspaper articles that were developed with managers of a blood donation organization and were based on real newspaper articles (see Appendix: Experimental Stimuli used in Study 2). Specifically, the article for the high trust treatment praised the social role of NPOs engaged in blood donation (the headline reads “Our blood saves lives—X is a nonprofit organization and helps to save lives!”). The second article with a low trust connotation referred to an NPO breaching donors’ trust and reads “Our blood is for sale—Organization X sells donated blood to health industry firms for profit!” We manipulated whether participants were provided a monetary incentive or no incentive. A total of 418 respondents (41 % female; 42.9 years) in the monetary incentive experiment were randomly assigned to one of the four treatments (the descriptive statistics are displayed in Appendix: Description of Measures).Footnote 2 As in Study 1, participants stated their intention to donate after the experimental stimuli, followed by brand personality evaluations for the nonprofit organization. Finally, they reported demographic information.

We conducted a manipulation check of our experimental treatment regarding NPO trust level and conducted a within-subject comparison of the trust before and after the experimental treatments. Specifically, we asked whether the respondents trusted the NPO to use donations properly (on a 5-point Likert scale; 1 = “not at all” to 5 = “very strong”). The results confirm the validity of the experimental treatments. For the low trust treatment, the average trust after the treatment is significantly lower than before the treatment (\(m_{\text{Trust}}^{\text{after}}\) = 2.71, SD = 1.35 vs. \(m_{\text{Trust}}^{\text{before}}\) = 4.03, SD = 1.06; p < 0.01); for the high trust treatment, the average trust is marginally significantly higher afterward (\(m_{\text{Trust}}^{\text{after}}\) = 4.03, SD = 1.12 vs. \(m_{\text{Trust}}^{\text{before}}\) = 3.91, SD = 1.22; p < 0.10). We used the same set of variables as in Study 1, employing identical scales (see Appendix: Description of Measures for the descriptive statistics). Analogously, the measurement reliability and validity was acceptable because the alpha values range between 0.75 and 0.96 and the explained variance between 57 and 89 % (see Appendix: Correlations).

To analyze the effect of trust on the interaction between incentives and brand personality postulated in H2a and H2b, we used the same model specification from Study 1. Specifically, we estimated eight models, which compare the monetary incentive versus the control group for the high- and low-trust treatment for each brand personality dimension. The variable operationalization was identical to Study 1. The brand personality dimensions and the indicator variables for the monetary incentive are mean centered.

Results

Table 2 shows the results of the regression analyses. The goodness of fit for all models is satisfactory with r-square values above 0.14. With respect to the direct effects of the brand personality dimensions, we find that the direct effects of integrity (Model 1) and nurturance (Model 2) are positive and significant for the high and low trust manipulations. Interestingly, in the case of less-trusted NPO services, we also find significant direct effects from the other two brand personality dimensions, ruggedness (Model 3) and sophistication (Model 4). This result is especially interesting considering the fact that these two brand personality dimensions do not show significant influences in Study 1.

Table 2 Effects of monetary incentives and brand personality dimensions on the intention to donate depending on the trust level
Full size table

Furthermore, the results show that the direct effects of monetary incentives depend on the trust level of NPO services. Specifically, we find positive effects from monetary incentives only in conditions of low trust. In these conditions, donors anticipate the opportunistic behavior of an NPO and may hence consider monetary incentives as an appropriate reciprocal exchange. In the case of highly trusted NPO services, providing monetary incentives, however, does not affect the intention to donate. These findings are consistent across all models.

To test H2a and H2b, we focused on the interaction effects between integrity and monetary incentives (Model 1) as well as nurturance and monetary incentives (Model 2). We postulated that the negative interaction effects should be amplified by the high trustworthiness of NPOs. For integrity, we discover a negative interaction effect (−0.870; p < 0.01) in the case of high trust. In contrast, for the low trust treatment, we find a marginally significant positive interaction effect between integrity and monetary incentives (0.405; p < 0.10). In support of H2a, a test of parameter equality for the high and low trust models shows that both parameters differ significantly (χ 2 = 11.28; p < 0.01). We find similar results for the brand personality dimension nurturance. Although the interaction effect between nurturance and monetary incentives in the low trust treatment is not significant, we find a negative effect in the high trust condition (−0.475, p < 0.10). Additionally, the parameters are significantly different (χ 2 = 5.78; p < 0.05). These results support our H2b.

The effects of the control variables are largely consistent with Study 1. We find that past behavior always drives the intention to donate positively, as does age. Gender and employment do not reveal significant influences.

With the help of Study 2, we were able to refine the results from Study 1, providing two additional insights on the effects of monetary incentives and brand personality. First, the effects of the NPO-specific brand personality dimensions are relevant independently of the trust level in an NPO service. In conditions of low trust, donors also consider the dimensions that are relevant in commercial contexts. Second, we discovered the undermining effects of monetary incentives on the brand personality of NPO services depending on the perceived trust level. The negative interaction effects between monetary incentives and the NPO-specific brand personality dimensions integrity and nurturance are stronger for highly trusted NPO services. In these cases, providing monetary incentives backfires because of negative interaction effects with integrity and nurturance. For less-trusted NPO services, however, monetary incentives may help increase donations because the positive direct effects of brand personality and monetary incentives are amplified by the positive interaction effects. If donors perceive an NPO to be untrustworthy, monetary incentives (that turn social markets into monetary markets) give donors the impression that they are participating in the profit chain.

Discussion

Despite considerable research on the role of brands for nonprofit services (e.g., Sargeant et al. 2008a; Tapp et al. 1999; Venable et al. 2005), studies have not yet shown how the positive effects of brand personality on the intention to donate may be affected by monetary incentives. In particular, no knowledge exists on how the provision of money as a commonly used incentive (e.g., in the blood donation context) affects the established link between brand personality and the intention to donate. Given the practical relevance for NPOs, this study addresses this research gap with the help of two experimental studies. We tested the interaction effects of monetary incentives and brand personality dimensions on donors’ intention to donate in the context of blood donation. The results show significant negative interaction effects from monetary incentives only with the NPO-specific brand personality dimensions of integrity and nurturance.

Based on these findings, we investigated whether the negative interactions between brand personality and monetary incentives vary with the perceived level of trust in an NPO brand. The analyses indicate that the interactions between monetary incentives and brand personality dimensions indeed depend on trust level. For highly trusted NPO services, providing monetary incentives undermines the positive effect of brand personality and, hence, is not efficient. In the low trust condition, however, monetary incentives may very well help to increase donations because they partly enhance the positive direct effect of brand personality on the intention to donate.

Research Implications

First, our results extend the existing literature on brand personality for nonprofit services by indicating that the positive effects of an NPOs’ brand personality on the intention to donate may be negatively affected by monetary incentives. Our study shows an additional explanation for the negative impact of monetary incentives on pro-social behavior, i.e., the negative transmission mechanism over brand personality. Consequently, future research on branding or monetary incentives for nonprofit services should account for interrelationships between NPO branding strategies and the provision of monetary incentives.

Second, the identified negative interactions between monetary incentives and brand personality depend on donors’ perceived level of trust in an NPO. Monetary incentives can even help NPOs with low levels of trust to enhance donors’ intention to donate. These results are interesting because they expand former psychological research on the effect of monetary incentives from a consumer behavior perspective (e.g., Ariely et al. 2009; Heyman and Ariely 2004).

Third, the study emphasizes the importance of brand personality dimensions that are specific to the nonprofit service context (Venable et al. 2005). In particular, the finding that the NPO-specific dimensions of integrity and nurturance influence the intention to donate indicates that research needs to account for industry-specific characteristics. Considering that NPOs’ success depends on donors’ trust in a brand, it is necessary to cater explicitly to the dimensions that foster perceptions of trust, commitment, love, and care. Therefore, we also contribute to the literature on business ethics as the results show that monetary incentives negatively affect the ethically relevant brand personality dimensions of NPOs and deter pro-social behavior.

Managerial Implications

The study’s findings also advance managerial knowledge. All over the world, there is a high demand for blood. For example, in the United States, blood is needed almost every 2 s, resulting in more than 30 million transfusions each year (American Red Cross 2015). Considering that a single blood donation can save the lives of up to three people, this demand is satisfied by one of the 41,000 blood donations that are collected every day. This high demand for blood continuously attracts new players to the social market. For example, after the German unification, a newly founded private for-profit blood donation service decided to provide monetary incentives to blood donors in East Germany and quickly became a profitable and strong competitor for the German Red Cross. However, NPOs must carefully assess the provision of monetary incentives to recapture market share. Considering that the leveraging effect of monetary incentives differs based on the level of trust, the results show that monetary incentives do not significantly increase donation intentions for NPOs that already have highly trusted or well-regarded brands. Under these conditions, investments in monetary incentives provide no competitive advantage and can even harm an NPO because they undermine the positive effect of brand personality on the intention to donate.

Given the profit potential of some social markets, new entrants may overcome their limited brand personality by simply providing monetary incentives. In such cases, in which donors do not trust an NPO, monetary incentives can indeed be used to increase donations because individuals may perceive a monetary incentive as a reciprocity signal that increases their willingness to donate. While this behavior may be beneficial for a new entrant (or, more generally, a less-trusted NPO), monetary incentives will influence social markets and turn them into monetary markets by setting price anchors well above the former level (of zero). Especially from an ethical perspective, the erosion of social markets would have negative effects on volunteering behavior in societies.

These managerial implications are useful for blood donation services but can be generalized to other areas of pro-social behavior. In particular, if such social markets are not regulated with respect to incentives for donors, new entrants or less-trusted NPOs may very well provide monetary incentives to attract donors. Regardless of whether blood, bone marrow, organs, or volunteering work are needed, the decision to provide monetary incentives could have far-reaching implications not only for NPOs but also for the respective market. Our results show that the brand personality dimensions integrity and nurturance that are related to ethical aspects of donating are especially affected negatively. Thus, an NPO’s principal objective and its role in the society as a nonprofit intermediary between donors and persons in need is altered. Therefore, the decision to provide monetary incentives has important economic as well as ethical implications for society.

Limitations and Directions for Future Research

Some limitations that provide avenues for future research must be acknowledged. First, the study has shown that negative interaction effects might neutralize the positive effects of different marketing instruments, leading to a suboptimal outcome. Despite the fact that we address the effects of two relevant marketing instruments, branding, and incentives, there may be additional interactions. Therefore, we encourage future research in the nonprofit sector to consider the moderating effects of other marketing instruments.

Second, this study uses experiments to investigate the moderating effects of monetary incentives and brand personality. Due to the resulting cross-sectional data, we are only able to analyze the short-term implications of the interaction effects. If monetary incentives are provided on a permanent basis, their influence on brand personality or other variables might change over time. Further research could explore the long-term moderating effects of monetary incentives using longitudinal data.

Third, both studies used the case of blood donations. Donating blood (and other body donations, such as bone marrow or organs) represents a highly invasive form of charitable behavior that not only requires time and physical effort but also could involve pain and affect a donor’s well-being. Alternative donation settings in which individuals volunteer and contribute time and expertise (e.g., building wells or houses), however, do not involve such invasive procedures. To investigate whether our results hold in different settings for charitable behavior, we encourage future research to extend the scope and analyze the effect of monetary incentives on the brand personality of other forms of nonprofit services. In addition, the effect of monetary incentives may also vary depending on cultural norms. Hence, future studies could consider how cultural norms affect the interrelationship of monetary incentives and brand personality dimensions. Furthermore, this setting could be extended to non-monetary incentives such as gift cards.