Fri, September 21 2012

What happens when companies offer choice in charity?

Katya Andresen's avatar

Author, Robin Hood Marketing

Filed under:   Cause-related marketing •

In the last of this week’s three-part series on research into consumer attitudes toward cause-related marketing, I want to focus on the increasing number of cause-related marketing campaigns that are designed to let consumers actively choose which charities a company supports.  Does choice in charity make campaigns more effective?  Do consumers like being in the social good driver’s seat?  And when can consumer choice hurt or help a company?

A new series of studies by Stefanie Rosen Robinson, Caglar Irmak and Satish Jayachandran of North Carolina State tackles those very questions.  And the findings, just published in the Journal of Marketing and covered by Cause Marketing Forum, include some interesting answers:


1. Consumer choice has a big positive impact on consumer donations. 

In a field experiment that took place at a roller rink, popular sour chews were sold and adults were asked to pay whatever price they wished for the candy.  Half were told the skating rink was contributing proceeds of the candy money to a set of causes, with the rink deciding how much money would go where.  The other half were told they could choose which charity benefited from their purchase.  The four causes were chosen based on earlier research showing what types of organizations the parents would be inclined to care about moderately.  On average parents (and they were all parents – their kids were there skating) paid far more for the candy—$2.17—when they were able to choose from four causes.  They paid an average of only $0.72 when the roller rink determined how the money would be divvied up. 

2. When the company chooses among charities, the fact there is more than one cause doesn’t matter much to the consumer.

In a lab study, university students were asked to choose if they were more inclined to buy a calculator from a company that “is giving a percentage of the proceeds from the sales of the calculator back to the community.” Participants got three versions of how that worked – that they got to choose from among four charities benefiting, that the company chose among four charities benefiting, or that the company supported just one charity.  In all cases 5% of the sales were donated.  Interestingly, people were more likely to buy the calculator when they got to choose the charity.  The interest level in buying the product when the company chose among charities or supported one charity was negligible.  In an interview with Cause Marketing Forum, study author Stefanie Robinson said this was her most surprising finding.  Whether a company donates to many charities vs. one charity may not matter.

3. Not all consumers are the same. 

Another study covered in the paper found that some people are more collectivist, especially in Asian cultures, while others are more individualistic.  Collectivist people tend to put community needs above personal ones.  While you might think individualistic people are more inclined to like choice in charity, that wasn’t true in the research.  The most individualistic people don’t care as much about choice in giving.  Collectivists definitely do, though, because the choice makes them feel they have a greater role in helping and that involvement fulfills their caring about community.  Choice in charity is therefore more likely to influence their purchase decisions positively. 

4. If there’s a strong fit between company and cause, choice matters less.

In a lab study, university students were told about a notebook for sale that benefited charity.  In this study, several variables were studied: consumer vs. company choosing among four charities – as well as a set of charities with a close fit to the product (four educational causes) vs. less of a fit (four environmental causes).  The researchers looked at how the variables influenced people’s intent to purchase the notebook.  Interestingly, when there was a strong fit between the company and cause, the consumer being able to choose the charities mattered less.  The students said they were less likely to purchase when it was up to them to choose than when the decision was left to the company.  Apparently, when there wasn’t a strong fit, study participants felt the company had a weaker CSR strategy and therefore wanted to influence the charity chosen.

5. If the social good goal is far off, choice matters less.

In most of the fundraising research I have reviewed, it’s clear that donors are more motivated to give when a campaign is close to its goal – and discouraged from giving if the goal seems far off or not achievable.  Turns out the same may be true with cause-marketing campaigns.  Consumers who were told that a campaign was only 20% to its goal were less likely to make a purchase when asked to decide which charity should be the beneficiary.  When they were told a campaign was 80% to its goal and they could choose the charity, they were more likely to purchase because they felt their behavior would have an important effect on the campaign.

  • Comment: (3)   

Comments

Given the above research would it also hold then this it would be to a charities benefit to provide a number of options for their donors to give as opposed to just one?  For instance two or three projects rather than just one.

Posted by .(JavaScript must be enabled to view this email address)  on  09/21  at  01:58 PM

Very interesting how people like to have a choice or control over their donations. However what I found most interesting was how easily they were discouraged by a goal that was possibly set too high to begin with.

Posted by Michelle Carlson  on  09/24  at  01:18 PM

I just want to point out that the studies appear to be done with university students (at least, two mentioned this explicitly)- therefore generalizing this to make statements about consumers as a whole is probably not a great idea. University students are an extremely specific subset of ‘consumers’ as a whole. Having said that I think there was a lot in interesting info in there that seems worth taking away -esp the indiv vs collectivist mindsets.

Posted by .(JavaScript must be enabled to view this email address)  on  09/28  at  12:11 PM

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