Last month, I spoke at a conference attended by affiliates of National Public Radio. This was a great audience, made up of people committed to delivering quality programming in an uncommercialized environment. Since my general theme was “neuromarketing for non-profits,” my audience included a lot of people with the challenging task of keeping their stations solvent by tapping large and small donors.
As most NPR listeners know, their periodic fundraisers tend to employ modest rewards for their donors – contribute $50 and get a Car Talk mug, $100 for an All Things Considered tote bag, etc. I always thought these benefits were a nice touch – certainly not a reason to make a contribution in and of themselves, but perhaps enough to get a contributor to bump up to the next donation level. Surprisingly, new research shows that this type of thank-you gift can actually reduce contributions.
The wrong way to say “thanks”
A paper in the Journal of Economic Psychology, The counterintuitive effects of thank-you gifts on charitable giving, describes a series of experiments that show that, contrary to expectations, rewarding contributors cuts donations in most circumstances.
The Yale researchers who conducted the study, George Newman and Jeremy Shen, found that the most likely reason for the negative effect on contributions was “crowding out.” In essence, the prospect of receiving a gift activated a feeling of selfishness which, in turn, reduced altruism and hence cut the average donation.
The biggest takeaway is that promising donors a thank-you gift can be hazardous to a non-profit’s income! But, there are ways to use gifts with positive results!
The right way to reward a donor
There are several ways to reward donors that are far less likely to hurt donations, and which may even increase them.
Reframe the Context. One experiment conducted as part of the study described the thank-you gifts not as rewards but as a means of furthering the charity’s goals. For example, a tote bag was said to have “our charity’s logo printed on the side, and when other people see the logo, it will raise awareness for our cause.” By making accepting the gift seem like a means of helping the charity, this description eliminated the negative effect on donations. (It didn’t improve donations, though.)
If you feel your gift strategy is working, this might be a way of boosting results. For example, a script might read, “When you put this Car Talk mug on your desk, your co-workers will be so jealous they’ll want to support our station too! So, help us reach the people around you by donating at least $75, and then put your mug where everyone will see it!”
Send a Social Signal. The paper does suggest that a gift that sends a social signal about the donor may have a positive effect. The authors cite previous work on this, and use examples like an invitation to an exclusive dinner or lecture, or membership in an elite group.
Looking at this from another standpoint, evolutionary psychologists believe that altruistic behavior is a way of signaling “fitness” to others, and hence public recognition of donations is often desirable. This strategy is most effective with larger donors, but it might be possible to create levels of exclusivity. I’ve seen alumni organizations do this – major donors get special recognition, of course, but even modest donors are awarded membership in a group.