The charity capacity curse

Abstract

Can displays of charity capacity cues paradoxically harm charities' fundraising efforts? Six pre-registered studies provide evidence of acharity capacity cursewhereby donors penalize charities for displaying capacity cues, such as human resources capacity, organizational capacity, and financial capacity cues. This curse occurs because donors perceive higher-capacity charities as needing less help. As donors typically donate based on need, they donate less to charities with superior capacity signals. This effect is attenuated when: (1) higher-capacity charities' needs are made salient, and (2) donors reflect on how their decision impacts end-beneficiaries. This research contributes to the literature on effective altruism and charity perceptions while offering managerial insights for charities seeking to optimize their fundraising communications.