Philanthropy and the Sharing Economy

The “digital revolution has created a new economy. It goes by many names — gig economy, sharing economy, collaborative economy, on-demand economy” (Smith, 2017, para. 3). Whatever you call it, this new structure for exchange, made possible by advances in technology and driven primarily by millennials — “the first generation of digital natives [to] come of age …, is redefining the ways people live and work” (Smith, 2017, paras. 3-4).

As explained by Möhlmann (2015), this new economy is composed of users instead of buyers. Their collaborative consumption, further defined by Belk (2014) as “people coordinating the acquisition and distribution of a resource for a fee or other compensation” (p. 1597), has created a new marketplace where access replaces ownership, flexibility supersedes stability, and community is more highly valued than consumption. Users in the sharing economy pay attention to the fact that collaborative consumption helps them to save money and is therefore in their self-interest.

“While the collaborative consumption trend is transforming the perception of individual ownership, philanthropists may consider sharing rather than giving as supportive/helping behavior in the new economy.”

Collaborative consumption is now well-settled in five sectors, according to The Digital Consumer: “peer-to-peer accommodation, peer to-peer transportation, on-demand household services, and on-demand professional services and collaborative financing” (para. 4). The consumers of the new economy are also sharing assets (e.g., cars, rooms, appliances); reusing assets (e.g., second-hand clothes, furniture); and prolonging the useful life of other items through maintenance, designing for durability, upgrading, etc. (Ellen MacArthur Foundation, 2015).

A 2016 survey of American adults on the scope and impact of the shared, collaborative, and on-demand economy, conducted by the Pew Research Center, found that in total, 72% had used at least one shared or on-demand service (Smith).

Research has found that saving money, convenience, and sustainability are the top drivers of sharing behavior (Dellaert 2019; Eckhardt et al. 2019). Status is also a key element here: According to a 2015 study by Samuel, about a third of customers would consider sharing instead of buying if the service offered them access to brand-name goods or services. On the other side, about a third would switch back from sharing to buying if it offered an easier path to getting what they want (para. 6).

Möhlmann (2015) showed that trust also has an important role to play in users’ satisfaction. “Trust” and “community belonging” clearly play a substantial role in an individual’s decision to participate in philanthropy, too. As does “reputation,” as we will see later on.

In this article, I do not argue that the determinants/mechanisms of sharing and giving definitively overlap, or that they are operationally the same. However, my concern is whether or not these similarities might mean that sharing activity negatively influences giving behavior.

Comparing Individuals’ Motivations for Giving Versus Sharing

An extensive review of the literature reveals that the primary motivations for sharing include:

Convenience: Convenience is one of the top drivers of sharing transactions and a third of conventional purchasers will consider sharing if it offers a more convenient option (Dellaert, 2019; Eckhardt et al., 2019; Samuel, 2015).
Cost Savings and Utility: Human self-interest drives an impulse to maximize utility and benefits from any given choice. Saving money and/or using a particular good or service to its greatest potential can be important determinants of collaborative consumption (Olson, 1971; Rapoport & Chammah, 1970).
Community Belonging: Many studies argue that community membership or the opportunity to join a community can drive collaborative consumption activities (e.g., Albinsson & Perera, 2012; Botsman & Rogers, 2010; Nelson & Rademacher, 2009).
Environmental Impact: Some sharing options are considered more eco-friendly than buying. Several studies concluded that sharers have a high level of awareness of environmental issues and/or sustainable consumption options (e.g., Botsman & Rogers, 2010; Hamari et al., 2015; Mont, 2004).
Product/Service Quality: Perceived quality is a major antecedent to service satisfaction and a sharer’s intention to use the service again (Cronin & Taylor, 1992; Fornell et al., 1996).
Trend Affinity and Brand Loyalty: Collaborative consumption is an emerging trend influencing consumer behavior on a large scale (Botsman & Rogers, 2010). Further, many users can be swayed if a sharing service offers them access to brand-name goods or services (Samuel, 2015). Brand sharers gravitate to well-known brands, whether those are traditional companies or trend-setting startups.
Trust and Familiarity: In a collaborative consumption context, “trust” simultaneously refers to trust in the provider of a collaborative consumption service and to trust in the other consumers one is sharing with (Bhattacherjee, 2002; Chai et al., 2012; Melnik & Alm, 2002). Additionally, some consumers’ reluctance to use a service for the first time — because of unfamiliarity or skepticism — could prevent them from sharing at all (Moeller & Wittkowski, 2010).
Information and Communication Technologies (ICT) Capabilities: Many sharing services are facilitated by internet platforms (Belk, 2014; Botsman & Rogers, 2010; Frost & Sullivan, 2010). Smartphones, in particular, with their ability to display various devices via apps, assure even more immediate access to data and collaborative services (Möhlmann, 2015).

A similar landscape scan of the motivations (mechanisms) for giving include (adapted from Bekkers and Wiepking, 2010):

Awareness of Need: Potential donors gain awareness of a need through the actions and outreach of beneficiaries (who seek goods, services, or outcomes) and charitable organizations (who communicate needs to potential donors) (p. 929).
Solicitation: The simple act of being asked to donate. The way potential donors are solicited — through materials, relationships, events, and other means — determines the effectiveness of solicitations.
Costs/Benefits: Donors often weigh the positive and negative outcomes associated with giving away some personal capital — whether that be financial or social capital.
Altruism: One obvious reason individuals may contribute money or other assets to charities is that they care about the organization’s impact and how their giving may support particular communities.
Reputation: The social consequences of donations for the donor.
Mental/Emotional Costs/Benefits: Research shows the many benefits that come with giving, including an “almost automatic emotional response, producing a positive mood, alleviating feelings of guilt, reducing adverse arousal, satisfying a desire to show gratitude, or to be a morally just person” (p. 938).
Values: “Supporting a cause that changes the world in a desired direction is a key motive for giving” (p. 941).
Efficacy: “The perception of donors that their contribution makes a difference to the cause they are supporting” (p. 942).

In reviewing these lists, it stands out that sharers and givers both converge and diverge in their primary motivations. The sharing economy is not, after all, about philanthropy, so it is not surprising that there are clear differentiations here. However, while conceptualizing the motivations of sharing and giving, we can see some overlaps and conflicts that could support a theoretical connection between sharing and giving behavior in the new economy.

Where Sharing and Giving May Intersect

I agree with Bekkers & Wiepking that “identifying systematic patterns in the mix of the mechanisms and interactions among them are important tasks for future research” (p. 944). However, rather than talk about interactions among the mechanisms of giving, I will try to identify some intersections among the mechanisms of giving and the determinants of sharing here:

The trust and the community belonging motivations exhibited by sharers can be tied to mechanisms of giving in my mind.
Awareness of need as a mechanism for giving could be examined in a conceptual frame of sharing behavior: “Awareness of need is a first prerequisite for philanthropy” (Bekkers & Wiepking, 2010, p. 929). People have to become aware of the need for supporting others’ material, social, and/or psychological needs. While the collaborative consumption trend is transforming the perception of individual ownership, philanthropists may consider sharing rather than giving as supportive/helping behavior in the new economy. Hence, as the result of the actions of beneficiaries — and to some extent sharers, also — we may see changes in awareness of needs influenced by collaborative opportunities and/or media.
Even if Möhlmann (2015) could not find significant effects of the environmental impact and trend affinity on the endogenous variables in her study of car- and accommodation-sharing behavior, for generalization purposes, they cannot be ignored for further studies, especially within giving and sharing conceptual and theoretical structures. Many previous studies conceptualized anti-consumption movements, alternative forms of green, ethical, or sustainable consumption as key determinants of sharing (Albinsson et al., 2010; Albinsson & Perera, 2012; Hamari et al., 2015; Kozinets & Handelman, 2004; Neilson, 2010; Ozanne & Ballantine, 2010; Philip et al., 2015: Schuitema & De Groot, 2014).

The mechanisms and determinants may also have interactive effects. For example, trend affinity may track awareness of need, as we have mentioned earlier that awareness of needs is often facilitated by institutional and personal media, which also impact the dissemination of trends.

Moreover, as determinants of sharing, status (Samuel, 2015) and community belonging make trend affinity a research concern here. In this regard, trend affinity cannot be ignored completely, either. “The mechanism of reputation refers to the social consequences of donations for the donor” (Bekkers & Wiepking, 2010, p. 936). Those social consequences may overlap some in status, trend affinity, and brand loyalty of sharers.

In philanthropy literature, values are intangible phenomena that come from within individuals, originating from donors, and directed toward themselves as well as beneficiaries (Bekkers & Wiepking, 2010). Unsurprisingly, secondary values may shift by interacting with other mechanisms and/or collaborative patterns in the new economy.

Conclusion

Collaborative consumption excludes sharing activities where compensation is involved, as well as gift-giving that constitutes a permanent transfer of ownership. Thus, collaborative consumption is situated somewhere between traditional forms of sharing within a family context and familiar market exchange activities (Belk, 2014). While comparing and/or linking sharing and giving, we need to consider social and socio-economic impacts. Consumers will choose sharing platforms based on short- and long-term gains as well as individual and community benefits.

While the sharing economy is growing up, we may face risks with market and regulatory failures that allow parts of the market to gain an unfair advantage over others. Sharing can ultimately create real consumer value according to Malhotra and Van Alstyne (2014), but giving creates public value. Sharers are more interested in lower costs and convenience than they are in fostering social relationships with the company or other consumers. They think about access differently than they think about ownership. Sharers are not looking for social value out of rental exchanges with strangers (Eckhardt & Bardhi, 2015).

As a coda, it is not difficult to say that sharers or collaborators are not closer to philanthropy/giving than buyers today. On the other hand, we cannot say that the sharers have far to go to reach giving when compared with buyers. There are some common determinants and/or mechanisms between sharing and giving behavior even as significant differences exist. This is what inspires my curiosity about whether or not there could be a negative relationship between sharing and giving behavior in the new economy in which one activity depresses the other.

I propose that any potential overlaps and/or conflicts could raise additional questions that I believe are relevant for the nonprofit sector and philanthropy studies, including:

What are the common mechanisms between sharing and giving behavior?
Do the determinants of sharing/collaborating behavior suppress giving behavior in the new economy?
Will philanthropists — meaning anyone who is currently giving or planning to give — replace their giving (some or all) with sharing in the near future?
How might the increase of consumer-to-consumer (C2C) interactions, spurred and facilitated by the sharing economy, influence the forms and volume of corporate philanthropy?
Should sharing count as philanthropy? Are sharers the next generation of philanthropists?
How will nontraditional for-profit operations influence the boundaries between business and philanthropy?

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