Whether to use premiums in fundraising is as hotly argued as the perennial debate over whether the toilet paper should roll out from the top or the bottom of the roll.
The latest addition to the tote bag scrum suggests that the practice is counterproductive. Yale behavioral scientist George E. Newman’s recently published study, The Counterintuitive Effects of Thank-you Gifts on Charitable Giving, concludes that “although people expect that the offer of thank-you gifts will increase donations, such offers actually reduce charitable donations.”
The finding, based on six different experiments, suggests that the transactional nature of the gift may cut into people’s charitable motivations. In other words, when people see a donation as a form of commercial transaction, the satisfaction that comes from being altruistic lessens, which leads to less generosity.”
In his seminal book Predictably Irrational, behavioral economics titan Dan Ariely makes essentially the same point by distinguishing between “social” and “economic” norms. Giving to a cause purely to save a child’s or a puppy’s life reflects social norms. Doing it and getting a puppy calendar in return flips the switch to economic, which yokes the “how much should I give?” question to the “what is the calendar worth?” question.
The result is almost always a smaller donation.