How charities can get an edge

The number of American households donating is falling. Behavioral science offers insights as to how charities can stand out.

Credit: Glen Gyssler

Alice G. Walton | Mar 25, 2020

Sections Behavioral Science

Collections Social Impact

It’s a tough time to be a US charity. The percentage of households donating has fallen, from 66 percent in 2000 to 53 percent in 2016, the equivalent of 20 million fewer households, according to the Indiana University Lilly Family School of Philanthropy. And while the share of households making contributions to charitable causes is down, the average dollar amount that donors are giving is essentially flat, only slightly higher in 2016 than it was in 2000. 

The giving landscape is complicated further by the 2017 US Tax Cuts and Jobs Act—which increased the standard tax deduction, thereby reducing an incentive for many households to give—plus by demographic shifts, new technologies and innovations such as crowdfunding and impact investing, and economic and market disruptions related to COVID-19. If the United States slips into a recession, charities can expect a sharp reduction of gifts. The 2008–09 financial crisis, which corresponded with the timing of the last US recession, accelerated a decline in giving: the percentage of Americans giving to charitable causes fell 2 points between 2002 and 2008; it fell almost double that between 2008 and 2010, from 65 percent to 61 percent.  

Moreover, times are particularly tough for small charities, which generally have limited staff and resources “and are just trying to keep their heads above water,” says Rick Cohen, of the National Council of Nonprofits. “Data are showing that the typical small or midlevel donor is giving less or stopping giving. Those donors are the lifeblood of most nonprofits.” Big institutions are likely fine, he says, but smaller nonprofits were already under-resourced and now are facing even more challenges—and they represent more than half of nonprofits, according to Nonprofit Finance Fund. 

In this environment, academic research can be vital in helping organizations understand what sort of solicitations are most effective. Even if a nonprofit can’t afford a full-time behavioral scientist, it can glean insights from a growing body of research findings. Behavioral scientists and economists are making new discoveries all the time about what inspires people to give, and to give more. 

No.
1

Make it personal 

Some people donate blood or organs, and in doing so give away a physical piece of themselves, but even people who give money rather than organs can feel as though they’re giving away something personal. A study by Minjung Koo of Sungkyunkwan University (a graduate of Chicago Booth’s PhD Program) and Booth’s Ayelet Fishbach suggests that tapping into this giving of “one’s essence” can be effective for charities of all kinds. 

Koo and Fishbach asked people to link their names—which they see as part of a person’s sense of self—with a cause, and then to fill out a survey that measured their feelings and reactions. When presented with a petition benefiting a children’s hospital, participants who signed their names felt more connected to the cause, compared with those who signed anonymously. Participants who signed their names were also more likely to support the cause the following day. 

In other experiments, the researchers first asked people who had donated blood in the past what corresponding dollar amount would make them indifferent to donating money instead of donating blood this time. They then asked half of the participants to envision donating blood while the rest envisioned donating the corresponding amount of money to a charity that worked to save the lives of mothers who lost blood during delivery. In another variation of the experiment, they let the participants choose which they’d rather donate, blood or money. In both conditions, Koo and Fishbach find that the participants asked to imagine donating blood, and those who chose to do so, reported feeling more connected and committed to the charity. 

“People are more committed to a cause if they have a chance to deliver something personal, if the essence of self goes with the help,” says Fishbach. “We don’t like cold, anonymous giving. We like the personal connection that goes with the gift. So it’s best practice to let helpers include something personal.”

No.
2

Be right around the corner

When asked to predict whether an object would exert more horizontal force if it were thrust from a point closer to versus farther away from a target, most people, it seems, think that closer is stronger. An archer trying to hit an apple with an arrow would presumably exert more force standing 100 feet from the target than if she launched her arrow from a mile away. 

Fishbach, this time with Northwestern University’s Maferima Touré-Tillery, who is another graduate of Chicago Booth’s PhD Program, also finds a connection between this notion and the idea that donations will have greater impact if they are spent closer to home. The researchers had participants in the United States read about a charity that helped people in Guatemala and Honduras. The two countries are about the same distance from the US, but Touré-Tillery and Fishbach manipulated the charity pitches so that one country sounded farther away. Their letters included phrases such as “right near you” or “all the way from Guatemala,” and sentences such as “We are contacting you from this short [long] distance because we need your help.”Participants had been asked to consider a scenario involving objects and horizontal force, and those who were reminded that a closer object would exert more force expected in turn that their donation would be more effective in the seemingly closer country. 

The researchers observed similar effects in an analysis of charitable-giving patterns among university alumni. People living closer to their alma mater tended to give more money than people living farther away—and when the distance was manipulated (again, by altering the wording in a fundraising letter), those who simply perceived that they lived closer to the school gave more than those who were led to believe the distance was greater. 

This technique is applicable to various types of fundraisers. Rather than stressing the often-used term impact, highlighting the physical nearness of the people or cause a donor’s money will benefit might be more effective.“Although impact is a key motivator of giving and social action in general,potential donors might tire—or even become skeptical—of hearing every organization emphasize its impact,” the researchers write. “Indeed by shrinking distance, charitable appeals can expand donors’ expectations that their actions will have an impact, and thus increase the likelihood of charitable contributions.”

No.
3

Help people remember who they are at heart

It’s important to make people feel close to a cause, but there can also be a fine line between feeling connected and feeling uncomfortable. And crossing that line can turn off potential donors.

To avoid this, and to put people in a frame of mind to give, charities should start by helping people connect to elements of their own personalities that they value, suggests research by University of Hong Kong’s Sara Kim, a graduate of Chicago Booth’s PhD Program, and Booth’s Ann L. McGill. 

Consider a charity that wants to show a photo or video to make the recipients of donations salient and real. The risk is that donors who see a difficult image—such as an abused animal, or a starving child—may turn away. Doing so produces guilt and creates a kind of emotional friction, according to the researchers. To release themselves from this feeling, people may downplay the situation by characterizing it as relatively minor or just a sad but unavoidable part of life, and ultimately decide not to make a donation. 

What seems to help counteract this chain of events is reminding people of a personal trait that is important to them, the researchers find. Even if the trait is unrelated to charitable giving, connecting with it—that is, self-affirmation—can reduce any defensive reaction. 

The changing giving landscape

Even before COVID-19 threatened the economy, fewer households in the US were donating to charity.

Indiana University Lilly Family School of Philanthropy’s Philanthropy Panel Study, 2019

For example, Kim and McGill had study participants write about a time when their own valued characteristics—say, artistic skills or humor—came into play. They then had the participants read about a charity that raised awareness of children’s-product safety, in part by sharing stories of children who had died due to a defective product. The researchers subsequently measured how likely participants were to share a Facebook post about the charity.

Those who had previously written about traits they valued in themselves were more likely to share the charity’s message on Facebook than those who hadn’t. This is because self-affirmation reminds people who they are at heart.“It’s a Popeye-like sense of ‘I am what I am,’” says McGill. “Just feeling fine about one’s existence—that is, being self-affirmed—makes a person a whole lot less defensive about processing troubling information.”

Granted, the message works best for donors who feel somewhat unconnected to the people in the depictions. In the case of product safety, the exercise didn’t have an effect on parents, who already felt strongly about the issue, write Kim and McGill. Similarly, male participants who first wrote about the traits they valued in themselves read for longer about a breast-cancer charity and increased how much they wanted to give—but the exercise didn’t have the same effect for female participants, who were already attuned to breast cancer messages and disinclined to discount the suffering of victims. Instead, women in the study easily related to the victims and showed concern, which contrasted with men, who didn’t as readily identify with the victims and were more motivated to discount their pain. 

No.
4

Give them an out

Say a charity asks for a one-time donation in return for never calling again. This “once and done” strategy can increase donations by upward of 50 percent, according to a study by Facebook’s Amee Kamdar (a graduate of Booth’s PhD Program), University of Chicago’s Steven D. Levitt and John A. List, Smile Train cofounder Brian Mullaney, and Booth’s Chad Syverson

Working with Smile Train, a nonprofit that helps correct cleft problems in children, the researchers sent mailings to 830,000 US households over 18 months. Half of the mailings asked potential donors to make recurring donations, and the other half made a once-and-done offer. The initial response rate was significantly higher in the latter group—0.66 percent compared with 0.34 percent. The once-and-done campaign raised more than twice as many initial donations ($152,928 versus $71,566) and took in more over the entire campaign ($260,783 versus $178,609).

The researchers suggest that classic explanations for charitable giving—including altruism and warm glow—are unlikely to be driving the results. Rather, people are essentially buying the privilege to not be contacted in the future, which may be worth a significant amount to them. A charity collects the difference between what donors give and the lesser amount they might’ve given otherwise. 

No.
5

Remind them how good it feels to give

While some people may respond to the promise of being left alone, others may prefer to donate periodically to achieve that pleasant warm-glow feeling. To this end, a study by List, University of Alaska’s James J. Murphy and Alexander G. James, and Michael K. Price of the University of Alabama finds that reminding people of the pleasure that comes from giving can significantly boost donations. 

The researchers teamed up with the Alaska charity Pick.Click.Give., which urges Alaskan residents to donate a portion of an annual dividend they receive from the state’s oil production. This payment comes from a long-term investment fund that has in recent years provided individual amounts between about $900 and $2,100 per year. 

They divided almost 300,000 households into three groups. A control group did not receive a postcard. A second group’s postcard read: “Make Alaska Better for Everyone,” a reminder of the pure value of helping others. The third group received a postcard with the note “Warm Your Heart,” designed to remind them of the warm-glow phenomenon, which the researchers note can also be thought of as “impure altruism” since the focus is on the benefit to the donor rather than the recipient.

And impure altruism is effective. While people in the “Make Alaska Better for Everyone” group didn’t give any more than those in the control group, those receiving the “Warm Your Heart” plea were 4.5 percent more likely to give and gave 20 percent more than those in the control condition. 

The researchers note that other variables may have affected the findings. For instance, some recipients may have felt that their relatively small individual contribution was unlikely to make a difference in making Alaska “better” and so were turned off from giving. But overall, and pending future research, the findings “suggest that giving is motivated by self-interests rather than concerns for charitable output per se,” the researchers write. 

No.
6

Frame it as pennies a day 

In the Christian Children’s Fund (now ChildFund International) ads from the 1980s, actress Sally Struthers informed viewers that for the cost of a cup of coffee per day, they could help feed a child. “Save a child for only 50 cents a day,” pleaded the actress Alyssa Milano, in 2013, on behalf of UNICEF. 

This periodic-pricing strategy may have staying power because it works. University of Rhode Island’s Stephen A. Atlas and Chicago Booth’s Daniel Bartels find that pitching a series of daily expenses makes an offer more tempting, both in sales and in fundraising. 

In one experiment, participants read about either donating $1 a day or making an annual donation of $350 to a charity helping underprivileged people. They were more likely to want to donate when the amount was framed as a per-day cost, which the researchers conjecture might help boost long-term or recurrent donations. 

In another experiment, Atlas and Bartels find that when there was an emotionally charged verbal or visual addition to the pitch—a picture of the charity’s beneficiary, for example—periodic pricing was especially likely to enhance participants’ intention to donate. 

No.
7

Use moral nudges

Chicago Booth’s Richard H. Thaler, a 2017 Nobel laureate, and Harvard’s Cass Sunstein wrote the book Nudge, which outlines how changing the architecture that guides choices can lead to different behavior. In a classic example, people will often save more for retirement if made to opt out of a savings program rather than into it.

Since Thaler and Sunstein coined the term nudge, researchers at a number of other schools have pursued the theory. Middlesex University London’s Valerio Capraro and his coresearchers find that simply reminding people of their morality can nudge them to donate. 

The researchers recruited participants online, giving each one 20 US cents and the chance to give a portion of that to an unknown partner. This setup is a form of the dictator game, often used in behavioral economics to explore socially directed behavior. They gave some participants what they call moral nudges by asking them what the moral thing to do in this kind of situation would be. Participants who were nudged gave significantly more to their partner than those who weren’t, and the same was true when the option was to donate money to an actual charity instead of a partner. In both cases, just asking participants to call to mind the moral action in a scenario boosted donations by an average of 44 percent. 

The researchers point out that their moral nudges, when compared with other strategies designed to entice people into giving, are relatively easy and inexpensive. The donation increase observed with moral nudges was similar to what’s been recorded for fundraisers that offer to enter donors into a prize lottery; one previous study found the lottery method boosted donations by 47 percent. The current findings suggest that, as the researchers write, “moral nudges produce—at least in the domain of crowdfunding donations in which we used them—essentially the same increase (44 percent), but are free of cost, that is, they allow to save the money for the prize of the lottery and the time needed to organise it and conduct it.This implies that our moral nudges might be a promising tool for crowdfunding charity donations to humanitarian organisations.”

No.
8

Tap into people’s cognitive empathy

Affective empathy is the ability to share another’s emotions and care about his welfare. 

Cognitive empathy, by contrast, comes from an understanding of another person’s situation. In the context of charitable giving, research has tended to focus on the role of affective empathy, but University of Wisconsin postdoctoral fellow Karen E. Smith and University of Chicago’s Greg J. Norman and Jean Decety link cognitive empathy to charitable giving.

The researchers gave surveys measuring both cognitive and affective empathy to medical students in each semester of their first three years of medical school. Toward the end of the study, they offered the students an opportunity to donate to charity up to $10 of the $60 they were to be paid for participating in the study. Students whose cognitive empathy rose over the course of the study donated more money to charity. Increases in affective empathy didn’t show the same pattern. 

“This work provides evidence that long-term changes in empathy over time have implications for individuals’ generosity, and shows that empathy doesn’t necessarily decline during medical school,” the researchers write. 

No.
9

Remind people of their mortality

If reminding people of their morality or empathy doesn’t do the trick to increase giving, try reminding them of their own mortality. 

University of Colorado Colorado Springs’ doctoral candidate Jennifer R. Roberts and Arizona State University’s Molly Maxfield had study participants (young, middle-aged, and older adults) think about two unpleasant prospects: dental pain or their own future demise. For the latter, the prompts were, “Please briefly describe the emotions that the thought of your own death arouses in you” and “Jot down, as specifically as you can, what you think will happen to you as you physically die and once you are physically dead.” 

They then measured how much money the participants felt like donating to charities. For young adults, the reminder of mortality led to lower donations than the dental-pain reminder, likely because this group naturally responds to mortality reminders with a strong urge for self-preservation. “Because young adults are often focused on creating personal security for the future, self-oriented bias, particularly after being primed with thoughts of death, may be developmentally appropriate,” the researchers write. 

For middle-aged participants, the two primes had about the same effect. But for the older adults, being reminded of their mortality boosted donations significantly, which suggests that charities may want to keep the effects of age in mind—thoughtfully—when designing campaigns. 

“When young adults are reminded of their mortality, they tend to save more money for themselves, whereas older adults tend to give more to others,” the researchers conclude. “In designing charitable giving drives intended for young adults, it would be prudent to avoid language related to mortality (e.g., leaving a legacy for the future, leaving something of oneself behind). In contrast, reminding older adults of their mortality may result in more generous giving behaviors and attention to future generations.” Older people may be taking the adage to heart that when you die, you can’t take your money with you.

No.
10

Add existential guilt 

Parents everywhere have discovered the power of using guilt, which research suggests may also have a charitable use. A study from Vilnius University’s Sigitas Urbonavičius and Karina Adomavičiūtė, UAB Eko Pirk’s Ieva Urbutyte, and Notre Dame’s Joseph Cherian finds that billboard ads tapping into people’s existential guilt, which the researchers define as “characterised by an awareness of the difference in well‐being between oneself and others,” can motivate giving. 

The researchers had participants look at a billboard ad that showed a dog in two scenarios: in the first, the dog was injured and appeared neglected, while in the second, he was happy and healthy. The accompanying text read, “You may donate funds to the organisation that takes care of homeless animals by donating directly or by purchasing this product (part of the price will be transferred for the same purpose).” 

Using a questionnaire to gauge the participants’ existential guilt, and measuring their intention to donate money or buy related products, the researchers find that the amount of guilt a person experienced had a positive effect. The study “confirmed that existential guilt prompted by advertising helps raise funds by both direct donation and indirect cause‐related purchasing,” the researchers write.It’s wise not to overdo it (especially if doing so will make people turn away), but a little guilt may prompt people to give.

No.
11

Take advantage of gender differences

Men and women may respond to different external motivating factors, according to a study from Columbia PhD candidate Matthew R. Sisco and Princeton’s Elke U. Weber

The researchers analyzed patterns of donations—totaling some $44 million—on the popular crowdfunding platform GoFundMe, along with survey results from some of the donors. In a confirmation of an earlier study by University of Arizona’s Martin Dufwenberg and Stockholm University’s Astri Muren, they observed that donors of both genders gave more when recipients of the campaigns were women, although this pattern was not statistically significant. 

But also, people gave more when they saw more donors of the opposite sex listed publicly—for example, when a woman saw more men listed as previous donors, she gave more than when an equal number of male and female donors was visible. This suggests possible “mating-related motives,” write the researchers, however subconscious the drive (this was all happening on a website, after all). “We do not expect that these were conscious decisions to strategically attract mates by donating more when more members of the opposite sex were visible,” they write, “but rather subconscious inclinations.”

Men were influenced, more so than women, by seeing the amounts others had already given. And women were more motivated by empathy than men were—or at least that’s what the messages they left with their donations imply. It’s possible, the researchers note, that men were just as motivated by empathy but were less likely to identify it.

Platforms such as GoFundMe, which launched in 2010, are relatively new, thus offer opportunities for researchers and charities alike. They also illustrate why more observations about how different people are influenced by others are interesting and necessary. As the donor landscape continues to change, “we should also expand our research lens to better understand the dynamics of giving,” says Indiana University’s Una Osili, who coauthored the 2019 research brief. Most donors, she says, give in some years but not in others, or switch from one charitable purpose to another. 

Staying abreast of the research is hard for small organizations that lack capacity and resources. “Even those who would likely very much want to keep up with the latest research simply don’t have the hours or minutes in their day to do so,” says the National Council of Nonprofits’ Cohen. But, he adds, “it is behavioral science that has helped nonprofits to understand what sort of appeals are most effective, and how different messages are needed for in-person events versus a hard-copy mailing versus a post on Facebook. Behavioral science is behind all of that.”

And amid so much change in the business of philanthropy, one thing remains constant: the need that drives a charity to ask for support isn’t going anywhere.