Charitable Giving: Applying and testing research insights

Dr. David Reinstein, Senior Lecturer, University of Exeter, March 2016

What is ‘give if you win’?

What is ‘opt-out social recognition’?

Engaging

Anticipated questions (FAQ)

Other resources to learn more

David Reinstein is a Senior Lecturer in Economics at the University of Exeter Business School. He has conducted and published research on charitable-giving and altruism for over a decade. He is engaging with professional fundraisers, charities, public organisations, financial firms and employers to bring his research to large-scale real-world settings. He is seeking to implement fundraising innovations – such as ‘give if you win’  and ‘opt-out social recognition’(described below)  – in a variety of contexts while rigorously testing their efficacy and impact. He is enthusiastic about facilitating controlled field experiments as well as less formal trials and pilots. More broadly, he is eager to exchange knowledge with non-academic professionals, to discuss and learn more about specific fundraising tools, innovations, and impact.

What is ‘give if you win’?

Millions of employees anticipate end-of-year bonuses, most notably in the financial sector. Before the bonuses are announced many are uncertain whether they will get a bonus, and how large it will be. For example, in 2012-13 UK bonuses totaled £37 billion. As well as being a political football in the wake of recent scandals and financial turmoil, these bonuses have been seen as a ripe target for charitable fundraisers. But how should charities and professional fundraising organizations go about this?

In particular, should they ask bankers in advance to commit a share of ‘their bonus in excess of expectations’ or should they wait and ask until bonuses have been revealed?

There are strong arguments – and significant evidence – that, in certain environments it would be better to ask conditionally, and in advance.

David Reinstein and co-authors have run several experiments to compare differences in charitable giving between two key environments. Participants had a ½ or ¼ chance of winning a (£5 - £20) prize, and asked to donate under one of two conditions, either,

  1. asked to commit to donate if they won, with the donation automatically deducted from the prize or
  2. asked to donate after they found out they had won the prize/bonus.

The results were the same in both a lab experiment and a field experiment involving a student employability promotion:  Participants, particularly males, committed to donate more in the first condition than in the second condition.

This is consistent with previous behavioural economics work suggesting:

What is ‘opt-out social recognition’?

Are people motivated to give more in social environments? If so, why? Do they see themselves as setting a good example, and influencing others to give? Are they concerned with their reputation for generosity? What sort of individuals actually have an influence on others’ giving? Are some (religious, social etc.) groups less motivated by reputation than others?

There is strong evidence for social motivation, although many people do give in anonymous settings, and there is also evidence that some people prefer anonymity and give less under recognition.[1] Economic models also suggest that people may want to use giving as a ‘signal of their goodness to others’; but advertising that you want recognition may nullify this. Thus, people may seek an involuntary’ or ‘normal’ way of donating publicly, that allows them recognition without giving off the impression that they are seeking it.

This is where opt-out social recognition comes in: it may be more effective to make recognition a default option. However, this might turn off those with a strong preference for anonymity. Thus, fundraisers may benefit from careful trials to measure which level of default recognition works best in which environments.

Engaging 

David Reinstein is engaging with professional fundraisers, charities, public organisations, financial firms and employers to bring this research to large-scale real-world settings. He is exploring the potential to implement ‘give if you win’ in a variety of contexts, while rigorously testing its efficacy and impact. He is enthusiastic about facilitating controlled field experiments as well as less formal trials and pilots. More broadly, he is eager to exchange knowledge with non-academic professionals, to discuss and learn more about specific fundraising tools, innovations, and impact.

Potential pilot designs are available by request. Nearly all aspects of the designs will be tailored to suit the environment, to deal with practical issues, and to mesh with partners’ goals and interests.  

Anticipated questions (FAQ)

How will the administrative costs of a pilot this be funded?

Participating organisations are not expected to contribute directly to fund this pilot. The main source of funding will be an ESRC Impact Acceleration fund. To facilitate this, it may be helpful for you to agree to be a partner in this application.

How will my organisation benefit from this collaboration?

Positive publicity

Knowledge exchange and innovation

Which charity are you fundraising for?

This can involve any charity that your organisation is supporting and enthusiastic about.

Will you need access to private employee data?

In general to analyse this properly, we would need only minimally-descriptive data: the group assigned (A1, A2, or B), and the amount donated, from each individual. Any data we would analyse would be stripped of identifying information, and made otherwise unidentifiable.

I am interested in trying this, but I don’t want to run a trial. Can you help me?

Yes, David Reinstein and the University of Exeter are eager to speak with your organisation about how you can benefit from this research and this idea, whether or not you are willing to pursue an experiment or a controlled trial.

What has been done similar in the past?

In the past, a range of  prominent economists and social scientists have worked with firms, fundraisers, and charitable organisations to investigate and measure ‘what works.’ These have yielded highly interesting and practical results. For example:

  1. Karlan and List worked with a prominent US nonprofit to run an experiment involving a major mail solicitation to over 50,000 prior donors. They found that the presence of  a ‘matching grant’ from a third party boosted response rates by about 2% and revenue per solicitation by about $1, but increasing the match rate did not have any additional effect.
  2. Huck and Rasul worked with on a postal fundraising campaign sent to 24,000 regular attendees at Bavarian State Opera House. Their result: ‘if charitable organizations can use lead gifts as they wish, our results show that they maximize donations given by simply announcing the presence of a lead gift.’
  3. Breman worked with two development charities (Diakonia and Save the Children) running a telephone solicitation in Sweden, involving 7710 existing regular donors. Result: Asking donors to increase their donation amounts starting in two months–rather than immediately–led to a 4% higher success rate and £0.50 more raised per month per donor  

What relevant experience do you have?

David Reinstein is a Senior Lecturer in Economics at the University of Exeter. He previously lectured at the University of Essex, where he helped found the ESSExLab and served as Lab Director. He has run laboratory and field experiments in the USA, UK, and Germany, including working with the Behavioural Insights Team, the Brixton Pound, Mid Essex Hospital Services NHS Trust and the HMRC. He has presented this and other research at a variety of venues and conferences, for academic, industry professionals, and policymakers, including the University of Oxford, the EC-JRC Vaccination Workshop,  the ESRC ‘Generosity and Well-Being’ workshop 2013, the Royal Economics Society, at the British Academy ‘Nudge and Beyond’ workshop. 

What other tools and questions are you interested in?

In addition to ‘give if you win’ David Reinstein’s research involves measuring the impact of variations in:

Outside of the philanthropic sector, David Reinstein’s research also involves

Other resources to learn more


[1] For example Harbaugh (1988) found that  alumni giving clustered around the minimum thresholds for particular levels of recognition. There is also evidence (Dellavigna et al) that people will pay costs to avoid being asked and avoid social pressure. Greater previously observed gifts are often seen to lead to greater donations, at least in some environments and within a range. Reinstein and Reiner found, in a lab experiment, that ‘that leaders are influential only when their identities are revealed along with their donations, and female leaders are more influential then males.’ Smith et al found, using JustGiving data from a marathon campaign, that larger early donations increase later donations, particularly for males.