Blueprint Fundraising

The Wharton School at the University of Pennsylvania recently published a paper called “Field Experiments in Charitable Contributions: The Impact of Social Influence on the Voluntary Provision of Public Goods.” It is great to have this kind of research in the public domain — so much direct mail and fundraising research is proprietary.

The question: will people give more if they are given a suggested donation amount and if they are told how much others have donated? The answer: yes. And there is an especially clear application for this in soliciting renewing donors.

The researchers looked at giving scenarios where the ask is ambiguous (they studied a public radio on-air drive). I’m simplifying the experiment but when donors called to make a pledge, the volunteer either asked if they were a new member or renewing. Then they either 1. Told them that another member had pledged $300 and then asked how much the caller would like to pledge or 2. Simply asked them how much they would like to pledge (without indicating any other gift amounts). They found a 12% larger gift size for those who had the social information (about the $300 gift).

The research included other experiments (email me if you would like more information). The researchers conclude that:

• Providing social information significantly increases contributions.
• It works best when you provide information that is seen as “relevant” to the donor and encourages “social conformity.” Callers who were told that another donor was the same sex (as they) gave significantly more than callers who were told that another donor was the opposite sex (i.e. women give more if they know that other women are giving more).
• There is a “boundary effect.” Use social information drawn from the 90th to 95th percentile of your organization’s contributions. Lower social information has little or no influence, while that over the 99th percentile actually has a negative effect. For example, donors were motivated to give more when they were told about a $600 gift (a number around the 90th percentile of that donor base) than a $1,000 gift (representing the 99th percentile).

You can try this experiment yourself — identify the size of gifts at your 90-95th percentile and use those as anchors in your gift arrays and in your fundraising requests. Tell donors about gifts made by people like them (same sex, family situation, donor level) to inspire larger gifts.

The current issue of The Economist has an interesting article about naming new species as a way to honour people (i.e. the spider named Calponia harrisonfordi) and as a way to fundraise for conservation causes.

GoldenPalace.com, an online casino hosted by the Kahnawake Mohawk First Nation, paid $650,0000 US to name a new species of Bolivian monkey, now known as Callicebus aureipalatii (Golden Palace monkey). The auction benefited the Wildlife Conservation Society.

This led me to look into the Golden Palace people and it turns out that they are known for pursuing some wacky naming rights, sometimes to benefit charity but mostly to generate publicity. Here’s just a sample:

• They paid $25,000 US for William Shatner’s kidney stone, with proceeds going to Habitat for Humanity
• They paid $28,000 US on eBay for a 10-year-old grilled cheese sandwich purported to bear a representation of the Virgin Mary in its toasted bread
• They paid Terri Iligan $15,000 to change her name to “goldenpalace.com”
• They also paid Edward Rouzin-Moy, a student at Eastern Illinois University, $232.50 US for a chicken breast that looked like Pope John Paul II
• In June 2005, Karolyne Smith sold the right to permanently tattoo an ad for the URL of goldenpalace.com on her forehead for $10,000 US

A few people have commented on the provocative nature of my Boo for the Red Cross post. Aren’t they a motherhood and apple pie charity? Aren’t they the first people on the ground providing essential services around the world in disaster situations? They certainly do and thank goodness they are there, undoubtedly saving thousands of lives every year.

I was being glib but there are many people disappointed in the American Red Cross (creators of the Blood Saves campaign I wrote about) and concerned for their future.

Why? Since 9/11 they have had constant leadership turmoil (three interim CEOs and three CEOs), they have been criticized for not informing donors that their gifts would not be spent on the disaster they donated to (particularly for the September 11 Liberty Fund), and they have been accused of providing inadequate emergency services and being unwilling to work with local charities in dealing with Hurricane Katrina. Recent Congressional hearings have been investigating their response to Katrina and their lack of accountability to the public.

(The Canadian Red Cross has had their share of problems too – remember the criminal charges in the hepatitis C and HIV tainted blood scandal that resulted in blood supply services being entirely removed from their purview. The American Red Cross still has responsibility for a significant portion of the US blood supply, although they have paid millions of dollars in fines for safety violations in tracking and distributing blood.)

The American Red Cross operates under a Congressional charter as the primary provider of humanitarian relief and emergency services during a large disaster. Thirty of their 50-member Board of Governors are local chapter representatives. Many, including former Red Cross CEOs, say those board members protect their local chapter interests at the expense of the larger mission. The US President appoints eight other positions. Can you say governance problem?

The Chronicle of Philanthropy had a special feature on the American Red Cross earlier this month to look at the organization’s complex challenges in meeting their important mission. They have interesting advice from 16 experts for whoever is brave enough to become their next CEO (available to subscribers only).