What drives overhead aversion in charity? Evidence from field-experimental variation in fundraising costs.

This article investigates donors' aversion to financing charities' fundraising expenses by experimentally disentangling two potential motives: a preference for charity efficiency and a preference for donation impact. Conducted in collaboration with the Protestant Church in Bavaria, Germany, the randomized field experiment varied how fundraising cost reductions were communicated to church members, distinguishing between weakly and strongly committed donors based on predicted adherence to personalized suggested donation amounts. Results show that strongly committed donors increase their donations significantly—by 21.1% on average—and are more likely to give above the suggested amount when efficiency improvements are signaled, but they do not respond to increased impact information. Conversely, weakly committed donors do not respond to efficiency signals and reduce their likelihood to donate when informed about increased impact, consistent with the public-goods crowding-out hypothesis. The findings suggest that overhead aversion among strongly committed donors primarily reflects concerns about charity efficiency rather than the direct impact of donations.