Avoiding overhead aversion in charity

Gneezy, Uri; Keenan, Elizabeth A.; Gneezy, Ayelet

doi:10.1126/science.1253932

Cited by 289 publications

(312 citation statements)

References 28 publications

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“…[A similar argument would be that donors find it strange that the radio station is giving to an unrelated cause (the food bank); this could also be interpreted as a negative signal of nonprofit quality.] This is similar to literature suggesting that donors dislike giving to nonprofits with high overhead expenditures (29). However, according to the radio station, its donors were likely already aware that the station offers thank-you gifts in fundraisers.…”

Section: Interpretation and Possible Mechanismssupporting

confidence: 72%

Demotivating incentives and motivation crowding out in charitable giving

Chao

2017

Proc. Natl. Acad. Sci. U.S.A.

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Research has shown that extrinsic incentives can crowd out intrinsic motivation in many contexts. Despite this, many nonprofits offer conditional thank-you gifts, such as mugs or tote bags, in exchange for donations. In collaboration with a nonprofit, this study implements a direct mail field experiment and demonstrates that thank-you gifts reduced donation rates in a fundraising campaign. Attention-based multiattribute choice models suggest that this is because prospective donors shift attention to the salient gift offer, causing them to underweight less salient intrinsic motives. Attention to the gift may also cause individuals to adopt a more cost-benefit mindset, further de-emphasizing intrinsic motives. Consistent with these hypotheses, crowding out was driven by those who donated higher amounts in the previous year (i.e., those who likely had higher intrinsic motivation). In a complementary online experiment, thank-you gifts also reduced donation rates but only when the gift was visually salient. This corroborates the mediating role of attention in crowding out. Taken together, the laboratory and field results demonstrate that this fundraising technique can be demotivating in some contexts and that this may occur through an attention-based mechanism.motivation crowding out | charitable giving | multiattribute choice | attention | saliency

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Section: Interpretation and Possible Mechanismssupporting

confidence: 72%

Demotivating incentives and motivation crowding out in charitable giving

Chao

2017

Proc. Natl. Acad. Sci. U.S.A.

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“…by mentioning a lead donor who has already provided some funding for the project or using a within subject design. Indeed, Gneezy et al (2014) as well as Huck et al…”

Section: Checkbook Givingmentioning

confidence: 99%

Matching Schemes and Public Goods: A Review

Epperson

Reif

2017

SSRN Journal

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Die Dis cus si on Pape rs die nen einer mög lichst schnel len Ver brei tung von neue ren For schungs arbei ten des ZEW. Die Bei trä ge lie gen in allei ni ger Ver ant wor tung der Auto ren und stel len nicht not wen di ger wei se die Mei nung des ZEW dar.Dis cus si on Papers are inten ded to make results of ZEW research prompt ly avai la ble to other eco no mists in order to encou ra ge dis cus si on and sug gesti ons for revi si ons. The aut hors are sole ly respon si ble for the con tents which do not neces sa ri ly repre sent the opi ni on of the ZEW. Abstract: Matching schemes and public goods: A reviewMatching schemes, where a party matches the contribution of others, reduce the effective price of a good and aim to foster its demand. We review the empirical literature on the effectiveness of these schemes in the context of public goods, especially in the field of charitable giving. As different measures of effectiveness are used, we classify results according to (i) the level of public good provision, (ii) the amount of individuals' contributions, (iii) the likelihood to give and (iv) the contribution conditional on contributing a positive amount. Generalizing results is challenging, since context specific factors matter. Predominantly, a match is found to create a significant increase in public good provision without crowding out individuals' contributions, while the effect on the likelihood of giving and contribution condition on contributing a positive amount is nonnegative. The discussion reveals several avenues for future research, as putting stronger emphasizes on long term effects, public good competition or heterogeneity in responses. JEL-Code: D01, D64, H41, L31

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“…For example, even when the total cost of a charitable project was fixed, donors were substantially more willing to give if their money was designated to be used for the impact share of costs (such as drilling wells), than if it was used in part for necessary overhead and administrative costs (Gneezy et al, 2014). From a rational accounting perspective, this allocation should be irrelevant.…”

Section: "Manage Decision Avoidance" [Relative To Its Alternatives]mentioning

confidence: 99%

Natural philanthropy: a new evolutionary framework explaining diverse experimental results and informing fundraising practice

James

2017

Palgrave Commun

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Philanthropic decision-making is important both for its potential to provide insight into human behaviour and for its economic significance. In recent years, investigations of charitable-giving behaviour have expanded substantially, including explorations from a variety of disciplinary perspectives such as economics, marketing, sociology, public administration, anthropology, evolutionary biology, political science and psychology. These investigations have resulted in a wealth of experimental results with each investigation accompanied by a discussion of potential theoretical implications. Most commonly, the various theories employed are helpful with regard to the narrow result of the investigation, but are not always useful in explaining the wider universe of results. Taking a comprehensive view of charitable-giving behaviour is thus limited to either employing a wide assortment of overlapping theoretical models, selectively applying each to fit individual phenomena, or merely referencing an ad hoc assortment of potential motivations. This circumstance suggests the value of a more unified, comprehensive approach to understanding the complete range of experimental and empirical results in charitable giving. This article proposes a comprehensive framework for philanthropic decision-making using a simple evolutionary approach incorporating interrelated fitness-enhancing strategies. The framework is then used in an extensive review of experimental and other empirical results in philanthropic decisionmaking. This review supports the framework proposition that giving depends on the tangibility of a gift's impact on altruism (direct or code), reciprocity (transactional or friendship) and possessions relative to its alternatives. Five example principles of fundraising practice demonstrate the practical applicability of this proposition: advance the donor hero story (tangibility of direct or code altruism); make the charity like family (friendship reciprocity); provide compatible publicity and benefits (transactional reciprocity); minimize perceived loss (possessions); and manage decision avoidance (relative to its alternatives). Understanding philanthropic behaviour from this perspective provides explanation and guidance for a wide range of charitable-giving behaviours and fundraising practices even in areas less amenable to traditional experimental investigation, such as charitable bequests and major gifts.

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Avoiding overhead aversion in charity

Cited by 289 publications

References 28 publications

Demotivating incentives and motivation crowding out in charitable giving

Demotivating incentives and motivation crowding out in charitable giving

Matching Schemes and Public Goods: A Review

Natural philanthropy: a new evolutionary framework explaining diverse experimental results and informing fundraising practice

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