Olin Business School Research Finds Trigger for Charitable Giving
Olin marketing professor’s latest study shows people are more charitable when they know how their contributions will be spent.
When it comes to charitable giving, details matter.
Donors give more money to charities when they know how it will be spent according to new research from Olin Business School at Washington University in St. Louis.
Knowing the details about how a charity uses donations are important, says Cynthia Cryder, assistant professor of marketing at Olin Business School, because they increase the perceived impact of a contribution.
Cryder finds in a new paper, “The Donor is in the Details" that charities can substantially increase a donor’s perception of the impact their contribution makes by focusing direct solicitation efforts on how donations help one specific person or address one specific problem. When donors know more, donors tend to give more.
“Talking about details and describing things in a narrow way is important,” Cryder says. “Details aren’t just important because they encourage sympathy or empathy but also because they help donors feel like they are actually making a real difference"
In three experiments, Cryder and co-authors, George Lowenstein, PhD, and Richard Schneines, PhD, both of Carnegie Mellon University, find that increasing details about a charity’s activities increases generosity.
The effect occurred when study participants donated to the same charity described in a detailed versus general way. It also occurred when they donated to an inherently tangible charity versus a more general one.
When a donor knew specific ways that a charity uses funds, Cryder says, it was easier to imagine how a specific contribution would be used and easier to imagine how it would make a difference.
“The broad scope of service many charities are trying to promote does not seem to be the most compelling way to convince donors to give,” Cryder says. “They feel any small contribution to a large-scoped project is at best a drop in the bucket"
While other research on charitable donations has found that emotions like sympathy and compassion are primary drivers of giving, the finding that perception of impact drives increased donations is new.
“In addition to emphasizing details in solicitations, as we studied in this paper, charities should consider decreasing the size of the overall need that is highlighted and sending thank-you letters that detail the impact of past donations to encourage future donations,” Cryder says.
In this particular paper, just describing details seems to make donors feel as if they will have more of an impact, Cryder says. The organizations aren’t actually changing the scope of their projects, they are just focusing on details rather than on the big picture.
“Instead of talking about how a charity like Oxfam — the large, very successful, international charitable organization — is one of the most influential charities in the world, we find it might be more effective to talk also about how they provide clean water to poor people,” Cryder says. "Just providing a single detail like that makes an important difference and it does seem to be that ’perceived impact’ drives this result.”
Watch video of Professor Cryder.
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