A Behavioral Scientist’s Guide to Increasing Charitable Donations
This guide is a multi-part series exploring how we can use behavioral economics to maximize charitable contributions. Check out part two of the series in March!
If you work for a non-profit, it is undeniable that your organization cannot exist without charitable contributions. Donations allow you to continue the important work you do, whether that work sustains artistic and educational institutions, or funds the reduction of poverty or disease.
Although charitable giving seems to be on the rise, getting people to donate to your non-profit organization can be a daunting task. Sometimes it seems that no matter what you do, people just do not want to contribute to your cause. If you ask for too much, people might ignore your request outright. But if you ask for too little, you may have difficulty getting the funds you need. So, the question is: how much should you ask for in order to make donors less likely to turn down your request?
It is likely that a good portion of the donations your organization receives come from online donors. Recent trends show that online giving is on the rise – in 2016, online donations increased by almost 8%. This suggests that nonprofits should focus much (though not all) of their efforts on online giving.
Defaults and Charitable Giving
Our global health and development team is currently developing a peer-to-peer charitable giving platform called Mbrella, with support from the Joep Lange Institute, on which donors from the United States and Europe can contribute to the healthcare costs of low-income African families.
As part of the design process, the team is conducting a series of online studies with an Mbrella prototype. Participants were told that they had a 1 in 50 chance to win $55. They could choose to donate some or all of this amount, but their decision would only be enacted if they won the 1 in 50 lottery.
In this particular study, participants were presented a default amount of $5, $30, or $55, but were free to adjust their final donation amount by clicking on the + and – buttons. We hypothesized that the $55 default would lead to the highest donation amounts, but the lowest number of donations.
Our hypothesis was partially confirmed, as the default amounts of $30 and $55 led to significantly higher donation amounts compared to a default amount of $5. However, donors gave about the same amount whether they received a default of $30 or $55. Additionally, the $55 default seemed to lead a substantial number of donors not to give at all.
Interestingly, it was not the lowest anchor amount $5 that led to most people giving, but the $30 default, which led more people to give compared to both the $5 and $55 defaults.
In the study, we also asked participants to complete several personality scales, such as the cognitive reflection test, and the big five scale (measuring openness, conscientiousness, agreeableness, neuroticism, and extraversion). An interesting finding on individual differences was that participants high in cognitive reflection (a tendency to carefully think things through rather than acting solely based on instinct), were less likely to donate the default amount overall.
Pre-selecting an amount reduces the number of steps it takes to donate, and encourages people to donate at that level. Besides making the act of donation slightly easier, the default amount itself sends an implicit message about what others are likely donating. When the default is set at a certain amount, it is easy to imagine that others are also giving at that level.
Preselect a moderate amount, if you can.
Providing people with a small default amount may not increase donations. One potential explanation is that the $5 amount is so close to zero that people may not see anything wrong with donating nothing at all. A default that is too large, on the other hand, may scare potential donors away.
On the whole, our results suggest that slightly modifying the experience of giving by providing donors with moderately high default amounts can increase average Mbrella donations. However, it is worth finding out the exact default amounts that would maximize donation by running pre-tests before you settle on your user journey design. This will enable your organization to continue its valuable work.
Ciara Lutz is a researcher at the Center for Advanced Hindsight at Duke University, an applied behavioral science research lab that helps people be happier, healthier, and wealthier. You can reach her at firstname.lastname@example.org