Wednesday, February 6, 2013

Do Thank You Gifts Increase Giving?

The conventional wisdom of charity fundraising is that if donors are offered or given "thank you gifts" for their donations, they are more willing to give and are more generous when doing so.  Some recent research by George Newman and Jeremy Shen of Yale University provides a stark contrast to this conventional wisdom.  Their paper, "The counterintuitive effects of thank-you gifts on charitable giving", was published in the October 2012 issue of the Journal of Economic Psychology (full text available here).  They find that regardless of the gift quality or the quality of the charity itself, offering a thank you gift actually decreases donations.  My rough interpretation of this finding is that when a thank you gift is offered it creates in the donor a mindset that the donation is more of an exchange transaction than a pure donation.  As a result, the donor (perhaps subconsciously) thinks of making a donation that ensures a more fair exchange.  In contrast, without a thank you gift, the donor's mindset is entirely on charity (altruism) and the donor is thus focused on generosity when making a gift.  The implications for charities are clear -- think twice before showering your donors with gifts.  Even if they think it is nice, they are likely to be less charitable in the process.

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