Participation of charity beneficiaries

Anecdotal evidence suggests that involving beneficiaries in charity decision-making ensures better governance processes. This paper provides the first experimental test of the effects of beneficiaries’ participation in the decision of how to spend a charity's funds. We consider four different mechanisms for choosing the funds destination: delegating the decision to the group leader, deciding through a public discussion, voting (one-head-one-vote), and weighted voting. We test the effectiveness of these mechanisms through an artefactual field experiment in a South African slum. We show that beneficiaries’ participation entails significantly higher contribution levels with respect to a control treatment where the decision is exogenous. Contributions are greater when the group delegates to the leader with respect to discussion and both types of voting. We examine possible implications and best practices for charities. Overall, our results highlight that beneficiaries’ involvement improves commitment, but the results depend strictly on the form of participation adopted.