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Small gifts may encourage new donors to engage with institutions.
Photo illustration by Justin Morrison/Inside Higher Ed | Aom W./Rawpixel
Higher education institutions across the country take in billions of dollars in philanthropic support each year from individual alumni and larger outside organizations alike. But what incentivizes those donors to start giving?
A new report, published by the Cornell SC Johnson College of Business on Wednesday, shows that although goodwill and passion for the mission of higher education at large are influential, for some, a college mug, T-shirt or other swag may seal the deal.
For years, previous behavioral science research and anecdotal experiences had alumni affairs officers spooked. They feared that overemphasis of gifts to recruit new donors could leave a sour taste in the mouths of longtime loyalists. But a new field study, conducted with a sample of about 22,400 graduates, suggests that such gifts may play a more significant role in increasing engagement than colleges think.
Kaitlin Woolley, an associate professor of marketing and co-author of the report, said fundraisers tend to focus on two main groups: frequent flyers, who are self-motivated and give frequently; and dormant donors, who may have given once in the past but aren’t currently active.
“The concern is that if you are trying to get attention from people who are maybe less interested in donating by using incentives … that strategy might harm people who are more engaged,” she said. “But we're finding that doesn’t seem to be the case.”
Y. Rin Yoon, a marketing Ph.D. student and Woolley’s co-author, described it as a “fear of over-advertising.” The last thing fundraisers want to do, she said, is to cheapen $50 or $100 donations with a trinket, or undermine people’s existing motivations.
“But the funny thing,” she added, “is that the more you advertise it, the more salient you make the incentives, that only helps increase people’s motivation to help the charity rather than having a backfiring effect that people assume.”
Starting With Seeds
The field study was conducted in partnership with a large university, which was unidentified in the report to protect data integrity, and a simple bag of seeds.
The partner institution sent out a swath of postcards to a range of alumni dating back as far as the class of 1940. Each card requested a donation by playing up the theme that alumni generosity allows current students to grow. And while half of the recipients just received the postcard, the other half also received a little package of black-eyed Susan seeds.
What they found was that recipients who hadn’t frequently donated in the past were 88 percent more likely to donate if they received seeds. And while the seeds didn’t have nearly the same level of influence on recipients who had already been giving—a 12 percent increase—the gift didn’t deter them from donating as feared.
“We only looked at the donation rate, so we didn’t have dollar amounts,” Woolley noted. “But based on conversations with the alumni affairs office, they were saying that this was a really cost effective way for them to increase the donations.”
And there’s potential to make the practice even more profitable in the future, she added. University fundraisers previously sent incentives out en masse, fearing that if they gave gifts to some alums but not all, word could spread and complaints would emerge about different treatment for different donors. But the study’s results helped quell that fear, by showing that frequent donors who didn’t receive seeds weren’t any less likely to donate than they had been before.
“We can make this even more cost effective by only sending incentives to the less [generous], and that will allow colleges to save,” Woolley said.
In addition to the field study, the report included three other lab-based experiments which used various virtual fundraiser events to apply more extensive variable controls. The results, Yoon and Woolley said, further affirmed the field study’s key finding: increasing the visibility of an incentive also increases the likelihood of giving.
Testing a ‘Debated Topic’
The use of gifts to motivate charitable behavior hasn’t been entirely unheard of in the past. In fact, a poll from the report showed that 71 of the 100 largest charities in the U.S. offer some kind of incentives for donating. But many nonprofit groups, including colleges and universities, have feared that these incentives will undermine engagement, leading them to downplay their offers.
For example, of the 71 charities that provided incentives, only four openly advertised them on their website’s homepage, and only 10 more displayed them on their primary donation page.
Charlie Melichar, a now-independent fundraising consultant who previously worked at Vanderbilt and Colgate Universities, said how and whether institutions use incentives has been “a debated topic.”
“So to see some science behind it, I think will help,” he said. “At the end of the day, these places are trying to motivate people to support their mission, their students and their programs. And if there’s something that can trigger giving, I think it’s a good thing.”
Richard Steinberg, a professor of economics at Indiana University–Purdue University Indianapolis and an affiliate of the Lilly Family School of Philanthropy, said that despite some slight inconsistencies between the researchers’ field and lab studies, the study affirms that “it probably wouldn’t hurt to give incentives to your small, irregular donors.”
He also noted that while the field study showed an 88 percent growth in likelihood to donate, it was based on a rate of less than half a percent, so the incidence of donations was still relatively low. But future experiments using a more conditional gift might further emphasize the benefit of incentives to specific groups of people, he said.
“It’s a great way to capture the attention of people who’ve never given before. And once they learn about the organization, they may turn into repeat givers,” Steinberg said.
Melichar cited one possible concern: using an incentive to recruit new donors could lead them to expect an incentive every time. But most donors, he said, are ultimately influenced by “belief in the cause.”
“Even though the incentive is a motivator, it's not the purpose. It’s helping people make a decision. But I’d like to think that ultimately, they’re choosing to support the organization,” he said. “Hopefully, it gives people some confidence that there are ways to do it, knowing that there are also ways to do it properly.”
