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Variable Donation Amounts in Cause Marketing, A Hypothetical

Today’s post is a brief thought experiment or hypothetical. What would happen if the donation amount in cause marketing was variable? How would that affect participation and results for the company and the cause?

For instance, suppose that you buy a Sole insole or ‘footbed.’ Sole was the topic of Wednesday’s post. One of the causes Sole sponsors is the shoe charity Soles4Souls. Soles4Souls is always looking for gently-used shoes. So let’s suppose that when you buy a Sole footbed that Sole donates $1. But if you buy a Sole footbed plus donate a pair of shoes then Sole donates, perhaps, $3. Would that increase in-kind donations for Soles4Souls? Would it increase sales for Sole?

You can probably imagine other variable donation scenarios as well involving Tweets or Facebook ‘likes’ or repins on Pinterest.

What I’m talking about is frequently used by experimental economists in laboratory settings. In experimental economics you’re given a number of choices to make using real money and given certain rules and circumstances. The tests are designed according to standard game theory.

The ‘dictator game’ is frequently used to test altruism in people, for instance. I cited an example last year whereby someone started with $10 and for every dollar they gave up and anonymous partner would get $5. In such cases altruism could be said to be ‘cheap.’ If, however, your anonymous partner got just $0.20 for every dollar you gave up, altruism would be very expensive.

What would you want to offer variable donation amounts? To encourage certain behavior, of course: to make altruism cheap.

And cheap altruism is a worthy goal, certainly in public policy settings. It's why some countries allow donations to nonprofits to be tax deductible.

What do you think? Respond below in the comments section.

Comments

Nice job, it’s a great post. The info is good to know!

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