Fixed effects panel regression results
The results from the fixed effects panel regression shown in Table 2 imply that neither of the monitoring cost proxy variables, days since the last update and the number of project updates, have a statistically significant impact on the amount of a donor's gift.15 Considering specification (10), which includes a full complement of regressors and controls for time effects, it can be seen that only two project-related attributes, the amount of funds raised by a project as the percentage of the fund-raising goal and the project's age, were shown to be significant in adjusting a donor's gift level. Although statistically significant, it is not clear that either regressor is economically significant in the sense that they make any practical difference in the level of gifts.
The project's age has an associated estimated coefficient of 0.13, which would imply that as a project's age increases by one day, the amount of the expected donation would also increase by approximately 13 cts. Considering project's range in age from 1 to 327 days, this would imply a range of $0.13–$42.51, which is economically significant within the context of a donation range of $10–$100. While at the lower end of the spectrum, the range is not very significant; as a project hits the 39-day mark, there is an increase of approximately $5 in the expected donation amount.
There are several factors that could explain the significance of the project's age on the expected donation amount. In particular, there may be a process of attrition taking place in which only high quality projects survive beyond a certain point, and lower quality projects are dropped from the available listing. Consequently, those left in the set are those projects that receive higher funds because of their quality, but the effect is seen via the project age regressor.16
The interpretation of the amount of funds raised variable is motivated by the literature on impact philanthropy. Impact philanthropists (Duncan, 2004) are donors who seek to maximize the impact of the last dollar of their gift. In this sense, a donor who goes to GlobalGiving ready to make a $20 donation may give only $10 to a project because it already has a high level of funding relative to its goal. The negative coefficient on the amount of funds raised variable suggests that, on average, the donors on the GlobalGiving site are impact philanthropists and will adjust their donation level downward as the percentage of the fund-raising goal completed is increased.17
The variables for both donors who subscribe to the newsletter and those who made a donation using guest checkout remain significant throughout the various specifications. Donors who subscribe to the GlobalGiving newsletter contribute $1.54 lesser, on average, than those who do not subscribe. In the same vein, donors who create GlobalGiving profiles (i.e., they do not use the guest checkout option) contribute $4.08 lesser, on average, than those who do not create a profile. Somewhat counterintuitive, a possible explanation for the results is that donors who subscribe to the newsletter or create profiles are more likely to contribute on a sustained basis but at lower amounts.
Contrary to H2, the results of the multinomial logit do not show any significant effects for project update variables (see Table 3). Whether or not the donor has given previously to any project on GlobalGiving is shown to be the primary driver in determining the likelihood of a donor returning to the site to make a subsequent donation after an initial contribution. For each additional donation, the donor becomes 4.20 times more likely to give to a different GlobalGiving project in the future than they are not to give again at all, and 3.09 times more likely to give to the same project in the future than not to give again at all. The project's age is shown to be significant in the comparison between the choice of giving to a different project and not giving at all, but it is not so in considering whether the donor gives again to the same project. In the instance of giving to a different project, it is shown that with each additional day that the project has existed, the less likely the donor will opt to give again in the future to a GlobalGiving project. Specifically, an increase of one day in a project's age will cause the donor to be 0.96 times more likely to be in the group of individuals that contribute again via GlobalGiving.