Becker Friedman Institute
for Research in Economics
The University of Chicago

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The Motivation to Give

Using science to inform philanthropic decisions

In an economy where money is tight, many charities are asking, “What motivates donors to give?” The Science of Philanthropy Initiative (SPI) addresses this question at their third annual conference, “Exploring the Science and Art of Philanthropy” at the University of Chicago.

SPI’s conference brought together almost 200 attendees—including eminent academic scholars, practitioners, and philanthropists—to discuss the psychology behind why philanthropists give, creating a forum to trade strategies to encourage higher rates of giving. Practitioners attending the conference included fundraisers from The Cara Program, Chicago Bulls Charities, Feeding America, American Heart Association, St. Jude, World Wildlife Fund, and the YMCA, among others.

In his opening address, SPI Principal Investigator John List remarked that total giving as a percent of income has hovered between 2 and 3 percent in the past 30 years,and remains stagnant. In an effort to increase the proportion of giving, academics and practitioners in SPI use the scientific method—in the form of field experiments—to determine what compels donors to give and why.

Maria Kim, CEO of The Cara Program, reflected on one session that addressed the question of whether giving was tied to empathy or impulsivity.

“Empathy predicts giving, whereas impulsivity predicts pledging but also reneging,” Kim said. “So we would start to see from the impulsive population the tendency to verbally commit or pledge to give earlier on, but in terms of the fulfillment ratio of honoring that pledge, it wasn’t as high as the empathic pool. It gives you some insights on who you want to appeal to and through what level of messaging.”

Judd Kessler of the Wharton School of the University of Pennsylvania examined the rate of charitable giving among high-income households and the motivations behind giving. In his presentation, he considered agency as an effective means to encourage a greater rate of giving.

Because wealth is associated with feelings of independence and autonomy, appeals to the wealthy could see greater returns by framing solicitations to induce feelings of agency, says Kessler.

He tested the question by designing a field experiment. Partnering with the Penn Fund, an organization collecting charitable donations from University of Pennsylvania alumni, Kessler’s team sent solicitations to almost 33,000 alumni. Each received either a control reply card or an agency reply card. The only difference between the two cards was one question: Tell us which is most important to you.

The experiment revealed that those from high-income households responded to an agentic appeal that gave them a voice about the preferred use of donated funds, giving around 400% more on average. This impact was not seen from lower-income households.

Still, perhaps one of the most valuable sessions was the philanthropist panel, moderated by Stacy Palmer, editor of the Chronicle of Philanthropy. Conference attendees heard firsthand from philanthropists Marshall Field V (The Field Foundation), Liam Krehbiel (A Better Chicago) and Susan Goodenow (Chicago Bulls Charities), who addressed the reasons why they chose to donate to charitable organizations and what factors compelled them to continue giving throughout the years: a) a program’s model and outcomes, b) the leadership of the organization, and c) the scalability of a program.

Understanding the target population and knowing exactly how a program reaches outcomes for that population is important. Philanthropists want to know how their money is being allocated, says Field.

He also takes note of organizational leadership—who is on the board and what is the status of the organization’s financial and operational health?

“Poor leadership can impact giving,” Field remarked, noting that donors don’t want to give to a flailing organization.

Finally, the panelists considered a program’s scalability and growth potential—will the program continue to grow, and does it have the potential to impact the community at large? Can similar organizations successfully learn from that program? Providing feedback on what their gift has accomplished and giving philanthropists updates on next steps is integral to cultivating future donations.

Maria-Alicia Serrano, senior research analyst at the YMCA of the USA, agreed that there has been a shift in the kind of information donors are looking for.

“In the nonprofit world, there’s a recognition that donors are no longer accepting just anecdotal evidence of how their funding impacted programming,” Serrano said. “They’re asking for more science to prove that, leading us to think about how our organization can help communicate to our funders and better align our outcomes to funds received.”

In addition to the keynote talks and panels, practitioners attended sessions throughout the two-day conference that focused on specific strategies focused on fundraising, programming, data science, incentives, and the psychology behind charitable giving.

Serrano remarked that collecting empirical data to inform programming decisions was just as important as providing outcomes to donors.

“More nonprofits, including the YMCA, want to know if the programs we’re running are working or not working, and why they’re working or not working. You don’t want to continue to throw resources and money and staff after efforts that may not be the most effective,” she said. “There’s a significant amount of pressure on nonprofits to minimize their overhead because the common perspective is that higher overhead equates to less effectiveness, and research and evaluation unfortunately falls into that overhead. Smaller nonprofits, in particular, may not be able to perform research and evaluation on their own, so to be able to access resources like SPI to get a better understanding of program outcomes is a really great opportunity.”

Kim noted one session that discussed charitable crowdfunding as a low-cost way to experiment with new fundraising techniques, especially among individuals who were not from high-income households.

“A lot of the cool data that we were able to see was [from asking,] how has the notion of crowdsourcing influenced the landscape of giving? Which types of givers are interested in being part of a community of givers versus an individual agent that gives and creates social impact? It’s really neat to hear about different crowdfunding techniques and see what the effect was to be the last person who brings the campaign over its goal, and how it influences different folks to give, and perhaps give a higher amount.”

A general sentiment from conference attendees was that nonprofits were being asked to do more with less, but the focus on decision making through using data science still remains a priority.

“It’s vital to the health of our country, not just from a social point of view but also from an economic point of view, to crack the code on how we best spend limited resources and help one another in human services.” Christina Krasov, vice president of Learning and Evaluation at the YMCA of Metropolitan Chicago said. “For John List and the team at SPI to be organizing and promoting this effort, and applying science and methodology with a cadre of eager economists and practitioners, [it’s] very noble.”

—Fareine Suarez