Asking For the Right Amount in Cause Marketing

Years ago when I was writing the Children’s Miracle Network Telethon I struggled with the question of how much to ask people to give. It was received wisdom that we should ask even for small donations; $5 or less, for instance . Or as we often put it, “anything you can give.”

Many years later, some of this seemed to be born out in the 2009 book “Yes! 50 Scientifically Proven Ways to Be Persuasive,” by Goldstein, Martin, and Cialdini. The authors highlighted an experiment in which people were asked for as little as a penny in door-to-door fundraising and actually the average donation went up a hair. They conclude that asking for ‘even a penny,’ would help many fundraising appeals.

But it’s easy to imagine some subsets of fundraising groaning over that study; direct mail fundraisers, for instance.

While donations during the Telethon had long since ceased being the raison d'etre of the show when I wrote it, the money that came in during the show did represent about 12 to 14 percent of total intake. It was an important part of the total. Moreover, once the show began, it was the only variable you could still influence. But way back when I never came to a satisfying answer over the question of how much to ask.

Now a new study has some conclusions for cause marketers and nonprofit fundraisers. It finds that what peers give has a strong bearing on what you and I and others will give.

The working paper, called “Peer Effects in Charitable Giving: Evidence from the (Running) Field,” comes from the Centre for Market and Public Organisation Bristol Institute of Public Affairs at the University of Bristol in the UK.

The paper’s authors, Sarah Smith, Frank Windmeijer and Edmund Wright, looked at two datasets composed of online fundraising pages for individuals doing the 2010 London Marathon on behalf of causes. In the UK as well as North America and I suspect elsewhere many individuals seek pledges on behalf of charities when they attempt marathons, bike rides, and the like. In North America, charities will often offer fundraising help to individuals in the form of individual pledge websites optimized for fundraising. In the UK Justgiving and Virgin Money Giving fill that role.

The study design was elegant and simple, drawing on data from the UK’s two largest online fundraising sites, Justgiving and Virgin Money Giving. Both sites list the most recent donations made. The authors looked at a sample of 10,597 pages and found that large donations positively effected no fewer than 20 subsequent donations.

Indeed, a single pledge of £100 can increase subsequent donations by an average of £10.

It was a little like those ‘pay-it-forward’ chains you here about at McDonalds or Starbucks, whereby some generous soul pays for the person behind them in line and it continues for dozens of patrons.

But Smith, Windmeijer and Wright also found that a single low donation could have the same effect. A single small donation lowered donations by about £5.

"Looking at online fundraising,” says Sara Smith, “also gives us some insight into the psychology of giving. It isn’t as simple as donors competing to be the most generous – or avoiding being the meanest. Instead, it looks like they are trying to find what they think is the right level for them personally, compared with their peers."

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