Cookies, Cocktails, and Charitable Giving
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Marketing May 5, 2014

Cook­ies, Cock­tails, and Char­i­ta­ble Giving

Remind poten­tial donors of the lux­u­ries they could pur­chase instead — and watch dona­tions rise.

Based on the research of

Jennifer Savary

Kelly Goldsmith

Ravi Dhar

Doing good does not nec­es­sar­i­ly come cheap. To fund their mis­sions, char­i­ties host bake sales and ban­quets, send friend­ly faces door to door, embark on mobile cam­paigns, and mail impas­sioned let­ters (com­plete with free address labels) to poten­tial donors. But no mat­ter the method, every effort results in that all-impor­tant request: Won’t you please donate?

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New research by Kel­ly Gold­smith, an assis­tant pro­fes­sor of mar­ket­ing at the Kel­logg School of Man­age­ment, along with her col­leagues Jen­nifer Savary and Ravi Dhar, both at Yale Uni­ver­si­ty, sug­gests that by tweak­ing how the request is framed, char­i­ties can increase their dona­tion rate substantially.

A lot of the time when we make pur­chas­ing deci­sions, we’re not con­sid­er­ing what else we could do with the mon­ey,” says Gold­smith. Remind­ing peo­ple of alter­na­tive ways to spend the cash — par­tic­u­lar­ly attrac­tive ways — tends to reign in spend­ing. For exam­ple, when decid­ing between a $1000 tele­vi­sion set or a $700 set, con­sid­er­ing how many DVDs $300 will buy can prompt us to go with the cheap­er television.

But under the right cir­cum­stances, these researchers find, the same strat­e­gy can also be used to make peo­ple more gen­er­ous with their finances. Remind peo­ple of a fun, indul­gent alter­na­tive to donat­ing to char­i­ty, and you will increase their like­li­hood of donating. 

In the domain of char­i­ta­ble giv­ing,” explains Gold­smith, you see a lot of ads on TV that say, for the price of cof­fee you can save a child’s life etcetera, etcetera…’ They’re say­ing that because a cup of cof­fee sounds cheap. There­fore, it sounds like they’re not ask­ing you for much. What’s inter­est­ing is: well, is that cup of cof­fee a lux­u­ri­ous indul­gence? Or is that cup of cof­fee some­thing prac­ti­cal that we think we need? What we find in our stud­ies is that makes a big dif­fer­ence. If you see cof­fee as a lux­u­ri­ous indul­gence, you’ll be more like­ly to donate.”

For the Price of a Caramel Mac­chi­a­to
In a series of stud­ies, Gold­smith and her col­leagues manip­u­lat­ed requests for mon­ey on behalf of char­i­ties such as the children’s wel­fare orga­ni­za­tion UNICEF. Par­tic­i­pants were hand­ed a $5 bill — their com­pen­sa­tion for par­tic­i­pat­ing in the study — along with a $1 bill and an enve­lope with a set of instruc­tions. Par­tic­i­pants then had to choose whether to hand an emp­tyenve­lope back to the exper­i­menter (in which case they could pock­et the extra dol­lar) or one with the dol­lar inside (in which case it would go to charity). 

In one con­di­tion, they were remind­ed of an attrac­tive, indul­gent alter­na­tive to donat­ing — that $1 is the cost of a fun iTunes down­load, for instance. In a sec­ond con­di­tion, they were giv­en a more prac­ti­cal alter­na­tive — that $1 is the cost of an edu­ca­tion­al iTunes down­load. In study after study, the researchers found that when the prod­uct was indul­gent — or even sim­ply framed as indul­gent — the dona­tion rate jumped. (In every exper­i­ment, dol­lars tar­get­ed as dona­tions actu­al­ly did go to char­i­ty. I get a lot of mail from UNICEF now,” Gold­smith jokes.)

The effect holds out­side the lab as well. In anoth­er study, Gold­smith and her col­leagues raised mon­ey for Doc­tors With­out Bor­ders by hand­ing stu­dents a preprint­ed enve­lope as they passed through cam­pus. These were real under­grads using real mon­ey from their real pock­ets,” says Gold­smith. We asked them to put what­ev­er mon­ey they want­ed in the enve­lope and return it to a col­lec­tion box we had.” As before, poten­tial donors were sig­nif­i­cant­ly like­li­er to donate when giv­en a indul­gent prompt — that $2 is about the cost of a cook­ie at a local bak­ery — than when they were giv­en a prac­ti­cal one — that $2 is about the cost of a bar of soap.

Peo­ple give more mon­ey when they know their name and dona­tion amount will be pub­li­cal­ly dis­played,” says Goldsmith. 

So why would offer­ing a pleas­ant, indul­gent alter­na­tive spur giv­ing? If any­thing, shouldn’t the more util­i­tar­i­an alter­na­tive be more effec­tive? The expla­na­tion relates to what psy­chol­o­gists call social sig­nal­ing” — the idea that we give to char­i­ty, in part, to sig­nal to the out­side world that we are the kindof per­son who gives to char­i­ty. Peo­ple give more mon­ey when they know their name and dona­tion amount will be pub­li­cal­ly dis­played,” says Gold­smith. Peo­ple are more like­ly to donate blood when their behav­ior can be observed by others.”

But just as we sig­nal our decen­cy to oth­ers, we also sig­nal it to our­selves. This less-stud­ied phe­nom­e­non, known as self sig­nal­ing,” was inves­ti­gat­ed in the cur­rent study. Even in pri­vate, when nobody can see what we are up to, we care about what our actions say about us. Cru­cial­ly, we believe that choos­ing not to donate reflects more poor­ly on us when alter­na­tive ways of spend­ing are pre­sent­ed as indul­gent. But when they are pre­sent­ed as rea­son­able, even nec­es­sary, it becomes eas­i­er for us to refuse to donate.

Char­i­ta­ble Advice
Gold­smith hopes that her find­ings reach char­i­ties in need of funds. They should use this!” she says. The effects we have observed are quite large, which is excit­ing in any area of research, but per­haps espe­cial­ly for research on char­i­ta­ble giv­ing. It’s neat to actu­al­ly demon­strate, both in the field and in the lab, that we can dra­mat­i­cal­ly increase the rate at which peo­ple were giv­ing to char­i­ty with these sim­ple interventions.”

And because we are so used to hear­ing com­par­isons like For the price of a cup of cof­fee” from char­i­ties, swap­ping a cof­fee out for some­thing a bit more lux­u­ri­ous should not arouse sus­pi­cion. This is key, says Gold­smith. If you try to guilt peo­ple into donat­ing explic­it­ly — by telling them that not donat­ing would be self­ish, for instance — it back­fires” and peo­ple are less like­ly to donate than if you had said noth­ing at all. There’s a val­ue to subtlety.”

Along these lines, char­i­ties should take care to choose the right alter­na­tive. A pair of piz­za scis­sors (yes, this is a real prod­uct) might not be a great choice, no mat­ter how indul­gent it seems. Pick­ing the prod­ucts is impor­tant,” says Gold­smith. There’s an art to that. You want prod­ucts that are not so weird that [the request] is going to feel manip­u­la­tive. What we did was use real­ly com­mon­place, every­day low-priced items, and we sig­nif­i­cant­ly increased dona­tion rates in a real­ly mean­ing­ful way.”

Goldsmith’s final word of advice for char­i­ties hop­ing to cash in? Be cre­ative. Even plac­ing a col­lec­tion bas­ket in an aisle or store­front where near­by prod­ucts are indul­gent could trig­ger gen­eros­i­ty in poten­tial dona­tors. If you’re ever dressed up as San­ta, ring­ing a bell for the Sal­va­tion Army, try stand­ing in front of a Pra­da,” says Gold­smith, or even a can­dy store!”

Art­work by Yev­ge­nia Nayberg

Featured Faculty

Kelly Goldsmith

Member of the Department of Marketing faculty until 2017

About the Writer

Jessica Love is the staff science writer and editor for Kellogg Insight.

About the Research

Savary, Jennifer, Kelly Goldsmith, and Ravi Dhar. Conditionally accepted. “Giving Against the Odds: When Tempting Alternatives Increase Willingness to Donate.” Journal of Marketing Research.

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