Little gifts, big donations?

November 21, 2005

When charities enclose a few cards as presents with their appeals for help, this increases the volume of donations considerably. This has been established by researchers from the University of Bonn and the Institute for the Study of Labor in a field experiment.

Dr. Armin Falk, professor at the University of Bonn and the research director at the Institute for the Study of Labor (IZA), has investigated the behaviour and motives of potential donors in cooperation with an international charitable organisation. For this purpose 10,000 appeals were sent out by the organisation. One third each of the letters contained a small gift, a large gift or no gift. The small gift consisted of a card and envelope, the large gift of four cards and envelopes.

The result showed that gifts increase both the number of donors and the size of the sum donated. Just one single card resulted in 17 per cent more donors responding. When several cards were sent the figure even rose by 75 per cent. In all the donors who received no gift donated 16,606 Euros. When one card was sent the amount increased to 17,584 Euros, with four cards it even reached 26,518 Euros. 'Apparently the donors feel obliged to repay the value of the gift they have received,' Professor Falk explains. 'The results confirm that most people act reciprocally, not selfishly. In other words, they reward kind or fair behaviour, even if that implies more expense for them.'

But what happens if in future all such organisations send little gifts along with their appeals for donations? 'It is hard to say if the amount donated will then increase overall,' Professor Falk says. 'Possibly donors are only prepared to donate a specific maximum. They are more likely to give that to the organisation which sends them cards than one which does not. All in all it would be a zero-sum game, therefore.'
-end-
The original article is available on the Internet at: ftp://ftp.iza.org/dps/dp1148.pdf

University of Bonn

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