1. Introduction
Donation is an action that must be sustained in order to practice love for humanity and to develop an inclusive society. The simple act of sharing a portion of personal property is a driving force that changes our global society. As countries around the world achieve economic growth and evolve from quantitative growth to the pursuit of improving the quality of life, donation has become a significant factor in the modern way of life [
1]. Donations contribute to improving welfare around the world through effects such as improving economic inequality and class imbalance, children’s education, and living standards [
2]. The role of nonprofit organizations (NPOs) is also gradually expanding, along with the increase in the need for their work. They play an important role in providing necessary services and materials to those in need at the local, national, and international levels [
3]. Despite the significant efforts of NPOs, donations are on the decline worldwide.
According to the Charities Aid Foundation (CAF) data index of accumulated donations from 126 countries over the 10 years from 2009 to 2018, donations from superpower countries such as the United States (first), Canada (sixth), the United Kingdom (seventh), and the Netherlands (eighth) gradually decreased [
4]. In addition, Poland and the Czech Republic were the countries with the largest declines in their average scores over the 10 years, and their monetary contributions decreased significantly [
4]. In comparison with high-donation countries, Korea ranked 57th; compared with its rapid economic growth, ranking 11th–12th in GDP (gross domestic product) over the past five years, Korea’s donation culture remains at the level of developing countries. In particular, in a 2019 social survey by the Korea National Statistical Office, the number of respondents who reported having donation experience decreased steadily over 10 years: 36.4% in 2011, 34.6% in 2013, 29.9% in 2015, 26.7% in 2017, and 25.6% in 2019 [
5].
It should be noted that trust in the nonprofit sector, in general, has been steadily declining, as have donations from Korea and other countries around the world. According to the Edelman Trust Barometer Global Report 2018 index of trust data from 28 countries, trust in the nonprofit sector decreased from 55% in 2016 to 53% in 2018 [
6]. It is particularly noteworthy that in the United States, a donor powerhouse, trust decreased from 57% in 2016 to 49% in 2018 [
6]. In addition, in the United Kingdom, respondents who indicated that they trusted charities decreased by 3%, from 51% in 2016 to 48% in 2018 [
7], and in Korea, the percentage of respondents who indicated that they distrusted such organizations increased from 8.9% in 2017 to 14.9% in 2019 [
5].
In many places, distrust is one of the direct results of corruption scandals among the chief executive officers (CEOs) of nonprofit organizations. For example, in the United States, between the years of 2008 and 2012, four organizations—the Cancer Fund of America, Cancer Support Services, Children’s Cancer Fund of America, and Breast Cancer Society—raised about US
$187 million, but it was later revealed that all but 2.5% of the grand total of funds had been embezzled [
8]. Most of the money was spent on the personal expenses of the founder, James Reynolds Sr., his family, and other staff members. The employees who were implicated in the embezzlement were charged. In 2018, Korea had its NPO CEO embezzlement scandal [
9]. The New Hope Seed raised US
$10.7 million, purportedly to support disadvantaged children and teenagers. However, the CEO used most of the money on apartments and overseas travel. Later, the CEO, who embezzled the children’s prospects as collateral, was sentenced to imprisonment. There are many similar negative reports about other nonprofit CEOs, and such problems have caused donors to be cautious about donating. Corrupt nonprofit CEOs worldwide have created a crisis for NPOs and the donation culture in general.
Therefore, this study examined the relations of NPO CEO reputations and individuals’ donation intentions. A CEO, or chief executive officer, provides strategic direction to organizations and has the ultimate responsibility for all company activities [
10]. Beyond personal reputation, a CEO’s individual qualities and abilities are associated with a company’s reputation, including their effects on the company’s likability and economic benefits [
11]. Reputation, as an intangible asset with a significant effect on real value investment, can play a role in for-profit companies’ abilities to secure resources and in nonprofits’ abilities to attract donors and funds. Understanding the perceived CEO reputation of the public will help in developing strategies to increase donation intention.
However, previous researchers have mainly studied the effect of an organization’s reputation, rather than the reputation of the CEO [
12,
13,
14,
15,
16]. To our knowledge, research has not explored the socio-cognitive determinants of how the NPO CEO reputation influences donation intentions. In view of the issues and troubling number of donation scandals over the years, it is important to study the NPO CEO reputation in the context of donation. Accordingly, the current study is an attempt to address this problem and arrive at possible solutions.
Toward this goal, this study applies the theory of planned behavior to evaluate the effects of an individual’s cognitive and psychological factors on donation intention and derives a donation strategy for NPOs that aligns with the CEO’s reputation. This study verifies the influence of factors relating to donation intentions as established through prior research and examines how donation intentions may differ depending on a positive or negative CEO reputation. Therefore, the current study poses two research questions to examine how a positive or negative NPO CEO reputation activates the proposed cognitive and psychological factors in relation to an individual’s intention to donate. This study is expected to provide practical implications for developing strategies to increase donation intentions.
Research Question 1 (RQ1). How does an NPO CEO’s positive reputation activate the proposed cognitive and psychological factors associated with individuals’ donation intentions?
Research Question 2 (RQ2). How does an NPO CEO’s negative reputation activate proposed cognitive and psychological factors associated with individuals’ donation intentions?
5. Discussion
In this study, we investigated the cognitive and psychological determinants of donation intention in relation to the positive or negative reputation of a nonprofit organization’s CEO. Adding moral norms, past behavior, and identification to the existing TPB, we constructed an integrated model and empirically analyzed the statistical influences of each variable. Using the responses of a Korean sample to a constructed scenario, we assessed the individual effects of a set of independent variables to address two research questions exploring the influence of the positive or negative reputation of a nonprofit CEO on respondents’ intentions to donate to that NPO.
To address the research questions, it is important to discuss how the relationships between constructs are (or are not) different across NPOs. Regarding the similar pattern observed across the two groups of positive and negative CEO reputation (RQ1 and RQ2), subjective norms and identification showed significant associations with individual donation intentions, regardless of whether the CEO’s reputation was good or bad. These results indicate that when the NPO CEO’s reputation is good, this can be incorporated into strategies to strengthen donation intention. Leveraging subjective norms and identification to strengthen donation intention can be an effective promotional strategy for NPOs with a negative CEO reputation as well.
First, it was found that subjective norms (H2) significantly impacted donation intentions for both reputations. When determining behavioral values, the opinions of other influential people affect support for an action. Furthermore, when important others confirm the positive value of a donation, the donation intention is more likely to be highly formed. Prior studies have shown that SN has different degrees of influence in different cultures. High normative effects have been identified in Asian countries with highly interdependent collectivist cultures [
2,
28,
31]. This study shows that SN has a high impact on both CEO reputations, which confirms that norms are also crucial for residents of Korea, an Asian country with a collectivist culture. These results support the results of prior studies conducted in collectivist cultural countries. Normative messages through important others should be delivered frequently. This is to emphasize not only that influential people consistently support one’s actions but also that their opinions help one’s decision. Further, seeing the donation process of influential celebrities can be effective for behavior modification. For example, if donation can be performed among celebrities in a reality TV program, this might motivate potential donors and raise awareness of donations.
It is noteworthy that identification (H6) influenced donation intention regardless of the CEO’s reputation. Nonprofit CEOs are not as well-known as for-profit CEOs. However, this study shows that the public can create an identification when a nonprofit CEO’s reputation is displayed, regardless of whether that reputation is positive or negative. We interpret this finding as identification formation by agreement to the value of the CEO. This type of value judgment and identification can directly affect donation intention: The stronger the identification with the NPO CEO, the greater the intention to donate. Therefore, it is necessary to provide information that can enhance the identification of NPO CEOs. In particular, emphasizing identification can lead to voluntary behaviors among citizens without special compensation for them [
83,
84,
85,
86]. Here, a person who has identified with a CEO could become a voluntary PR expert who actively informs others of relevant information. We arrive at this conclusion following prior evidence that identification with sports teams affects spectator consumption [
87] and that identification with colleges significantly affects fundraising activity [
54].
With regard to these findings related to identification, communicating with the public is the most important strategy. To promote good reputation, one communications strategy would be to share the NPO’s values, directions, and management plans that the CEO is considering. For instance, in addition to active communications online and offline, SNS (social networking service) viral marketing can be developed. This strategy would deliver shared values in a friendly and accessible way. A continuous exchange of shared values will help identification between the CEO and the individual and contribute to the development of donation intentions. In a bad reputation, a different communications strategy is needed. If there is a reputation-related problem, improvement must be directly delivered, and information that highlights the positive value of the CEO must be provided.
In contrast to our expectations, we found that attitude (H1) did not affect intention to donate in either reputation group. This finding contradicted prior findings that showed that attitude affected donation intention [
19,
23,
88]. In other studies, however, cultural differences limited the influence of attitude [
24,
89], and variables such as moral norms and past behaviors had greater influence [
90]. We propose two possible explanations for our findings. One, it may be that the perception of reputation did not play an important role in forming attitudes toward the organization or intention to donate because the scenario focused on the personal reputation of the CEO. If we manipulated the scenario for the NPO, the result for attitude might have been different. In addition, there is also the possibility that attitudes might not have had a significant effect because of the strong influence of subjective norms, a characteristic of Korea’s collectivist culture.
Next, we review the differences (RQ1 and RQ2) between positive and negative CEO reputations. In the positive reputation scenario, perceived behavioral control (H3), moral norms (H4), and past behavior (H5) were all significant, but they were all non-significant for the negative reputation. We interpreted this finding as indicating that perceptions of bad reputation have become an obstacle to activating the cognitive factor, which is an individual’s sense of control, belief, and moral responsibility. Additionally, respondents’ dissatisfaction with the bad reputation indicates that past behavior may not support future donation intention.
First, perceived behavioral control (H3) produced the greatest influence for the good CEO reputation group. This suggests that the stronger the belief in self-control and the more seriously one takes personal ownership of the donation decision, the greater the intention to donate. Indeed, the findings of this study are consistent with those of previous studies on blood and organ donation [
34,
35,
91].
Moral norms (H4) had the second highest influence after PBC in the good reputation group; intention to donate increased with greater perceived moral responsibility. This result is consistent with previous findings for MN as a powerful predictor of actual donation behavior, along with moral responsibility or obligation [
23,
30,
38]. Researchers consider the influence of moral norms to be a major factor in the TPB as well as in charitable donations in general [
3,
92,
93].
Last, past behavior (H5) also showed significant results for the group with the good reputation scenario. Following Sargeant [
94], who showed that satisfaction with past donation experiences affected donation behavior, we interpreted this finding to result from participant satisfaction with a good reputation. Accordingly, to increase the donation intentions of those with donation experience and to encourage them to become regular sponsors, satisfaction can be increased by continuing to maintain good reputation and delivering mementos or letters of appreciation. This is because psychological and social stimuli or external rewards from donations increase the willingness to donate to other donation agendas and strengthen the role that donors play [
95].
Thus, PBC, MN, and PH were significant when the CEO’s reputation was good. It is essential to strategically emphasize that donations can begin changes in society, have a good influence on others’ lives, and be morally right. In the context of a negative CEO reputation, by contrast, it would be necessary to focus on solving fundamental problems, such as reputation, in a way that incorporates a long-term perspective and then using the communication strategies referred to above.
Donations are close interactions between donors and NPOs and are based on mutual trust that the money given will be used for its intended purpose. The CEO of a nonprofit organization is the person who oversees the organization’s management and is fully responsible for its transparency and trust. However, the scandals reported in the media regarding CEOs’ abuse of donations may cause the public to wonder if they should bother to donate or if their donations will be used appropriately. The strategies discussed above may have reinforced donation intentions while also helping organizations with negative reputations to overcome that challenge. However, these strategies can only be a short-term solution. To increase the sustainability of a donation culture, it is necessary to have a good reputation that can build trust over the long term.
Nonprofit CEOs should focus on reputation management. When incidents that negatively reflect on business ethics occur, people do not rely on traditional media coverage alone. Instead, they interpret news, evaluate companies, and share information with others. At present, positive effects must remain sustainable over the long term, in any field. Thus, it is necessary to increase CEO and NPO value through reputation management. This enhanced value benefits donors’ loyalty and plays a role in promoting positive feedback. When a good reputation is established, it is necessary to actively promote its content of a good reputation through a range of media channels. Communicating a good reputation can be useful information that potential donors can use to judge a nonprofit organization’s CEO and develop a donation intention. The work of Román-San-Miguel and Díaz-Cruzado [
96] also highlights the need for expert communication with the public through media channels in the nonprofit sector. This communication can produce to a link between the organization and the audience [
96]. Thus, it is time to suggest sufficient information so that donors can evaluate in multiple dimensions and select the NPOs they wish to donate to. If the communication strategy is pursued after reputation management begun, it will improve the overall donation culture. Managing reputation requires significant effort and time. However, these efforts are essential for the sustainability of the donation culture and the recovery of public trust in NPOs.
6. Conclusions and Limitations
This study investigated determinants that affect individuals’ intention to donate to an NPO when its CEO has either a positive or a negative reputation. We compared and discussed similarities and differences in relationships among the determinants and derived important implications from these discussions from a deeper perspective. It is noteworthy that, unlike the case of corporate CEOs, systematic research has not been conducted on the effects or relations of NPO CEOs on donation intention in past literature. In the past, individual donation decisions focused mostly on evaluations of NPOs, whereas in this study we emphasized the role of the reputation of the NPO CEO. Managing the CEO’s reputation will enhance the value of the NPO and the CEO, and it may help produce a donation culture that has a good influence on society. This study empirically identified methods of increasing donor intentions from the perspective of the CEO’s reputation. Although there are relatively modest contrasts across NPOs with good or bad CEO reputations, these findings provide practical information that the controversial NPO must alter the relevant reputational aspect to improve public donations.
Separately from these theoretical findings and managerial implications, this study had a few limitations. First, as there is not a well-known or validated scale that can be used to evaluate NPO CEOs, scenarios were constructed based on reputation factors in for-profit company CEOs. A non-profit organization CEO reputation scale could have produced more detailed research results. Therefore, in future study, an NPO CEO reputation scale should be created. Second, to obtain a better understanding of individual-CEO identification, a qualitative analysis of the reasons for the respondents’ decisions is needed. Knowing the cause of the identification will be essential in managing the reputation of the NPO CEO and establishing a better marketing strategy. Third, following previous research, this study examined both those with and without past donation behavior. It may be interesting to identify the antecedents to intention to re-donate or continuance intention to donate. Future studies may obtain more detailed results for groups with past donation behavior. Lastly, follow-up studies should utilize stratified sampling to identify the differences between groups more accurately.