You, you’ve got thousands of followers on Twitter, hundreds of Facebook friends and an enviable Klout score as a result. And, according to some early research from Professor Kimberley Scharf at the University of Warwick in the UK, you’re probably a selfish SOB when it comes to donating to charities!
Scharf’s thinking is highlighted in her theoretical research paper, “Private Provision of Public Goods and Information Diffusion in Social Groups.” Scharf is an economist at the University of Warwick’s Centre for Competitive Advantage in the Global Economy.
“Information transmission about giving opportunities is undermined by free-riding incentives,” Scharf said in a press account. “I count on other neighbours to convey information and so save on the effort of doing it myself,” she said. “As well as relying on others to pass on information, it may also be true that people are even relying on others to donate.”
In economics a free-rider is someone who receives benefits from an activity, but doesn’t have to pay for it. Someone who sneaks into a movie theater or concert venue without paying is a free-rider. So, too, is the person who takes an apple off someone else's tree.
Scharf's paper “describes a social proximity-based mechanism of information transmission in groups of individuals who consume a pure public good. In the mechanism we study, information about quality for alternative modes of provision of a public good can spread from one individual to the next just as it does for private goods.”
“However, unlike in the case of private goods, better informed individuals face positive incentives to incur private costs in order to transmit information to their less informed neighbours, because this can bring about an increase in collective provision, the beneﬁts of which they partake in.”
“In this setting, the sharing of information has the characteristics of a local public good that is conﬁned within individual social neighbourhoods, even when voluntary contributions fund the provision of a pure public good that spans all neighbourhoods."
“Thus, incentives to engage in costly fundraising are stronger when social neighbourhoods are smaller; consequently, large societies composed of comparatively small social neighbourhoods can sustain comparatively higher levels of private provision of collective goods,” Scharf writes in the paper’s introduction.
What are the implications of Scharf’s theory for cause marketers and fundraisers?
One of them might be to think hard about courting those people who are the connectors of the broadest sort. It could be that they’re too connected with everyone else to really connect with your cause in a meaningful way. For me this really rings true in big cities where you might be able to get people to one of your events, but you might not be able to get them to actually care about your cause.
Scharf's introduction suggests a second implication; moving from broadcasting to narrowcasting. When the ‘neighborhood’ as she calls the social network is small, there’s greater onus on you to be the helping hand. If my next-door neighbor asks for a favor, I’ve far more likely to grant it than I am to the neighbor who lives only a block away and far more likely to grant that favor than I am to the neighbor who lives a mile away.
Labels: cause marketing, Cause Marketing Research, Kimberley Scharf, nonprofit fundraising, University of Warwick