Nonprofit fundraising with virtual reality

• Author: Seung‐Chul Yoo,Minette Drumwright
• DOI: http://doi.org/10.1002/nml.21315
• Published date: 01 September 2018
• Date: 01 September 2018

RESEARCH ARTICLE

Nonprofit fundraising with virtual reality

Seung-Chul Yoo

1

| Minette Drumwright

2

1

School of Communication & Media, Ewha

Womans University, Seoul, Republic of Korea

2

Stan Richards School of Advertising & Public

Relations, University of Texas at Austin, Austin,

Texas

Correspondence

Seung-Chul Yoo, School of Communication &

Media, Ewha Womans University, #301 Ewha-

POSCO BD, 52 Ewhayeodae-gil Seodaemun-gu,

Seoul 120-750, Republic of Korea.

Email: Communication@ewha.ac.kr

An increasingly competitive fundraising environment and

the new media ecosystem have prompted nonprofit organi-

zations to strengthen their digital marketing capabilities.

Recently, a few nonprofits have used virtual reality

(VR) technology in fundraising, which raises questions

about its effectiveness. Does VR work, and if so, through

what psychological mechanisms? Through a lab experi-

ment, the usefulness of VR as a digital fundraising tool was

investigated. Specifically, we compared the media effects

of experiencing thesame fundraising video on two different

devices: (a) a head-mounted VR and (b)a tablet. The results

revealed that donation intention, perceived vividness, per-

ceived interactivity, and social presence were all signifi-

cantly greater with the VR medium than with the tablet

medium. Next, we tested and successfully verified the

mediation effect of social presence on donation intention.

Finally, we verified that a viewer's sensation-seeking ten-

dency served as a moderator when the device type influ-

enced donation intention. Specifically, the media effects of

VR were stronger for high sensation seekers than for low

sensation seekers. This study contributes to theory and

research by verifying the VR fundraising effect and identi-

fying the key role of social presence, and it also provides

important managerial guidelines for media design in VR

fundraising campaigns.

KEYWORDS

fundraising, nonprofit organizations, social marketing,

virtual reality

1|INTRODUCTION

Several trends are converging in nonprofit marketing that highlight the potential of online fundraising

approaches in general and virtual reality (VR) in particular. The number of nonprofit organizations is

Received: 19 August 2017 Revised: 22 March 2018 Accepted: 27 March 2018

DOI: 10.1002/nml.21315

Nonprofit Management and Leadership. 2018;29:11–27. wileyonlinelibrary.com/journal/nml © 2018 Wiley Periodicals, Inc. 11

growing rapidly around the world (Casey, 2016), which intensifies competition for donors' discretion-

ary income (Fritz, 2016). Increased competition has prompted nonprofits to emphasize low-risk,

high-efficiency marketing approaches (Collins, 2005; Hurley & Hult, 1998), and the explosive

growth of digital communication in recent years has enabled nonprofit organizations to access large

markets of stakeholders without incurring the significant costs associated with traditional media

(Burt & Taylor, 2003; Maxwell & Carboni, 2016), especially if they have a creative idea. In 2017,

86% of U.S. nonprofits used some form of online fundraising (Nonprofit Research Collaborative,

2017), and 61% of donors worldwide reported that they prefer to give online (Your Public Interest

Registry and Nonprofit Tech for Good, 2017).

Among digital media, VR has the advantage of vividly communicating and enabling viewers to

interact with distant beneficiaries as if they were actually present with them. The immersive experi-

ence provided by VR is in sync with contemporary fundraising trends that encourage viewers to

focus on introspection and their own personal judgment of the cause (Chouliaraki, 2010). Recently, a

few nonprofit organizations have experimented with VR in fundraising. For example, in May 2015,

UNICEF Korea was the first among the UNICEF member nations to raise funds for Syrian refugees

using VR (Kang, 2016). It used VR to enable people to empathize with the suffering of the refugees

even though they were unable to visit the refugee camps. Viewers who experienced the VR campaign

showed 80% higher participation in donating to UNICEF Korea than those who did not (Kang,

2016). The use of VR by a few nonprofits raises questions that are the focus of this research: can VR

close the social and emotional distance between affluent potential donors in developed nations and

those needing donations in the developing world and prompt increased donations? If so, what are the

psychological mechanisms through which this happens, and do individual differences matter?

Research on the use of VR devices has been conducted in various fields such as tourism (Huang,

Backman, Backman, & Chang, 2016), education (Merchant, Goetz, Cifuentes, Keeney-Kennicutt, &

Davis, 2014), advertising (Van Kerrebroeck, Brengman, & Willems, 2016), and communication

(Hammick & Lee, 2014), but no academic studies have been conducted in the field of nonprofit fun-

draising. VR is ripe for investigation as a fundraising technique because it is moving beyond the

stage of experimentation to the stage of marketization in the media market. According to the Knight

Foundation's 2016 report “Viewing the Future? Virtual Reality in Journalism," 25 million people

worldwide will own VR devices by 2018, and media content will simultaneously evolve in accor-

dance with the development of VR devices (Doyle, Gelman, & Gill, 2016). For example, the

New York Times is working with a VR specialist company, VRSE, to apply visual storytelling to the

news using advanced video devices such as VR and augmented reality (AR) (New York Times,

2016). This trend is predicted to accelerate with the convergence of various content via social media,

and Facebook is already investing heavily in VR technology with the acquisition of Oculus VR for

$2 billion in 2014 (Matney, 2017).

In the following sections, the theoretical and conceptual underpinnings of this study will be

described, and hypotheses will be proposed. The experimental procedure will then be described, and

the results will be reported. Theoretical and managerial implications of the findings will be discussed,

and limitations and directions for future research will be identified.

1.1 |Background

This study draws its theoretical and conceptual underpinnings from three areas, which are addressed

in this section. First, Media Richness Theory provides a theoretical explanation for the proposed

effectiveness of VR. Second, Social Presence Theory facilitates an examination of the psychological

12 YOO AND DRUMWRIGHT