Thu, March 13 2008

Why People Give Redux

Katya Andresen's avatar

Author, Robin Hood Marketing

Filed under:   Fundraising essentials •

I scooped the New York Times.  Not really - but I did post on why people give a few days before the Times published a fascinating article on that topic.  And fortunately I was on the same philosophical page as the Great Gray Lady, who I think it’s fair to say has a bit more prestige than yours truly.

If you didn’t read the article, I recommend it.  (Registration may be required to read it.)  The article looks at rare research into giving through the lens of social psychology and the world of behavioral economics, and it’s fascinating.

Here are the key points:

-People aren’t very rational or clear-headed in how or why they give - it’s an emotional act. 
-Because this “warm glow” theory holds, giving is not a zero-sum game.  In fact, if a Warren Buffet gives $31 billion to the Gates Foundation, people don’t stop giving because they think there is not need - they are inspired to give because of the warm feeling the gift made.  People want to do what other, good people are doing.
-In line with the above idea, people are likely to give toward a campaign goal if you have seed money or a start toward a goal that makes it seem attainable.
-Matching gifts elevate response, but the amount of the match makes no difference.  So even though you’d think a 3-1 match would be more motivating than a 1-1 match, it is not.  It’s the presence of a match that matters.
-Seed money may be more important than matching gifts in fundraising, because it outperformed matching gifts.
-People give more money if they think other people are giving more money—unless the amount other people are giving is so huge they it feels irrelevant.  In other words, there is a donation sweet spot.  If people think others are giving $300 on average, they may give more; if they think others are giving $1,000 on average, it will not have the same inspirational effect.
-People gave more when they were told their donation made them eligible for a prize.

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