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People tend to respond negatively towards charities’ overhead spending, which refers to the overhead aversion, with an increasing sensitivity caused by the increased amount of information available about charitable organizations' overhead rates. Essay I examines unpacking of the overhead as an approach to lessen donors’ overhead aversion by emphasizing the importance of overhead, which differs from the past research that tried to seek solutions by eliminating the need to cover overhead expenses by donors. Three empirical studies show the unpacking effect and examine the underlying mechanism.  Study 1 reveals that even though there are different types of unpacking method (i.e., descriptive and response unpacking), both type of unpacking makes donors allocate more of their money to cover the charity's overhead. Study 2 shows that unpacked overhead description increases donors’ attitude towards the charitable organization, which in turn increases donation intention. Finally, Study 3 investigates how unpacked overhead description affects attitude to a greater extent. Unpacked description of the use of overhead costs signals charity's transparency, which simultaneously increases trustworthiness and perceived transparency. These components are the factors that influence donors' attitude towards the charity. The results in this paper give a significant contribution by giving solutions to change the way society perceives charity overhead.
Charitable organizations spend the donated funds for programs (i.e., helping the cause) and for their operations (i.e., overhead). To achieve repeat donations, donors demand feedback on the use of their donated money for helping the cause and for overhead. However, charities have difficulty in offering personalized feedback about the use of funds. Essay II highlights the importance of feedback and suggests simple ways to report how the donated money was used. Three empirical studies examined the influence of the feedback of donated money usage on donors. Study 1 shows that certain and transparent feedback increases attitude toward the charity and future donation intention. Study 2 presents that the transparent (vs. opaque) feedback effect is mediated by the perceived impact of the donation. Study 3 tests the framing effect of the feedback message. Donors perceive the impact of donation is greater when the feedback on overhead presents the amount spent in terms of helping the cause than in terms of money spent on overhead. This paper contributes by showing how to communicate with the donors to increase evaluations about the charity and donation intentions.

Contents

Abstract		iii

I. Essay I: Mitigating Overhead Aversion Using Unpacking Effect	1
Abstract		1
1. Introduction	2
2. Theory and Hypotheses	4
2.1.	Overhead Aversion in Charitable Donation	4
2.1.1.	Overhead aversion	4
2.1.2.	Overcoming Overhead Aversion	6
2.2.	Unpacking	7
2.2.1.	Unpacking Effects	7
2.2.2.	Types of Unpacking	8
2.2.3.	Descriptive and Response Unpacking Effect on Donation Allocation	11
2.3.	Descriptive Unpacking on Attitude Toward Charity	12
2.3.1.	Effects on Transparency, Trustworthiness, and Efficiency	12
2.3.2.	Effects of Unpacking on Charity Evaluations	15
3. Study 1: Descriptive and Responsive Unpacking	16
3.1.	Method	16
3.2.	Results	17
3.3.	Discussion	17
4. Study 2: Unpacking Effect on Intention to Donate	19
4.1.	Method	19
4.2.	Result	21
4.2.1.	Attitude and Intention	21
4.2.2.	Mediational Test	21
4.3.	Discussion	22
5. Study 3: Unpacking Effect on Attitude Towards the Charity	23
5.1.	Method	23
5.2.	Results	25
5.2.1.	Attitude Towards Charity	26
5.2.2.	Perceived Transparency	27
5.2.3.	Perceived Trustworthiness	28
5.2.4.	Perceived Efficiency	28
5.2.5.	Mediation test	28
5.3.	Discussion	30
6. General Discussion	30
Reference	32
Appendix A	40
Appendix B	41

II. Essay II: Relieving Overhead Aversion Using Transparency in Charity’s Feedback of Program and Overhead	42
Abstract		42
1. Introduction	43
2. Feedback to Donors	45
2.1.	Feedback in prosocial domain	45
2.2.	Transparency of PO feedback	46
3. Study 1: Influence of Feedback Transparency	49
3.1.	Method	50
3.2.	Results	52
3.2.1.	Attitude toward the charity	52
3.2.2.	Donation intention	54
3.2.3.	Mediation test	55
3.2.4.	Moderation Test	55
3.3.	Discussion	56
4. Study 2: Mediating Role of Perceived Impact	57
4.1.	Method	57
4.2.	Result	58
4.2.1.	Attitude, donation intention, and perceived impact	58
4.2.2.	Mediation test	59
4.3.	Discussion	60
5. Framing of Feedback on Overhead Information	60
6. Study 3: Framing of Feedback Information	62
6.1.	Method	62
6.2.	Results and Discussion	63
7. Conclusion	64
References	66


Table
Essay I
TABLE 1.	Study 3: Overhead Description Properties	24
TABLE 2.	Study 3: Means of Each Cell	26
Essay II
TABLE 1.	Study 1: Feedback Properties and Messages	52
TABLE 2.	Study 1: Attitude and Donation Intention by Feedback Message Type	54



Figure
Essay I
FIGURE 1.	Descriptive and Response Unpacking Examples	9
FIGURE 2.	Study 1: Overhead Percentage by Overhead Packing	18
FIGURE 3.	Study 2: Donation Intention by Overhead Description via Attitude towards Charity	22
FIGURE 4.	Study 3: Attitude Towards the Charity by Overhead Description	27
FIGURE 5.	Study 3: Mediation Test Result	29
Essay II
FIGURE 1.	Study 1: Attitude Toward the Charity by Feedback Message Type	53
FIGURE 2.	Study 1: Mediation Test Results	55
FIGURE 3.	Study 2: Mediation Test Results	59