What’s All This Noise about Not Giving “Thank You” Gifts?

Recently, a small raft of articles have appeared about a new study, published in the Journal of Economic Psychology, apparently showing that offering a gift as a “thank you”  (what we in the industry would call a “premium” offer) can reduce the amount of money people will donate to your charity.

I found this to be old news.  But the press (and some marketing gurus) didn’t.   The top GOOGLE search on this was entitled “Charities: Don’t Thank Donors With a Gift! – Forbes”.Well, that’s the private sector for you:  making studies to “discover” what fundraisers already know.

To read the study itself, you have to pay $35, which I considered a strong disincentive (so I did not).  But there were two press articles that caught my attention: first, from Psychology Today, which (mostly) explained the study itself, and second, from “neuromarketing” guru Roger Dooley, who of course used the study to dispence advice on how to market better.

So first, is there anything to all of this?  What did the study really show?

Here’s what happened:  when researchers asked  a group of people how much they were willing to donate to a charity (in this hypothetical case, to public broadcasting) the people who were offered a “commemorative pen” worth a few dollars as a thank you gift (i.e. a “premium”) said they would give less than the group who were not offered the gift.

Second, the study also said (this is a bit more complicated): people were (hypothetically) entered into a lottery, and then told they had won 95 dollars, and then were asked how much would they be willing to donate to a charity if they were either offered a tote bag as a “thank you”, or nothing in return.  Again, those offered no thank you gift said they would give more.

So in both cases, the offer of the “thank you” (premium) gift reduced the amount people said they would donate.  The authors found this (amazingly) “counter-intuative”, and BANG, it was in Forbes, on Twitter, etc.

To me, besides being old news (we’ll get to that) all this broke two cardinal rules I think need to be followed when talking, reading or writing about fundraising:

RULE NUMBER ONE:  For the most part, people LIE about whether they will donate money, and how much, and why, especially in public (as in a focus group).

People  don’t do this on purpose.  First of all, no one wants to admit that they are stingy, or that they don’t care, or even sometimes, that they are WILLING to give, (because it could be diven by something very personal, an ill family member, a controversial political conviction, etc).

But even more relevant, we know for a fact, from modern psychological and behaviorial testing, that people believe they are better (at almost everything) than they really are (including being a good donor.)  Personally, if we had $10 for every person I met who  told me, with utter conviction, that they were a member of WWF, yes, they had donated to us, I swear we would never have to fundraise again.

That’s why, in fundraising, there is only one way to learn things:  test, test, and test again.  For REAL.  (When I raised money for public broadcasting, we found most testing went AGAINST the very things people told us in our focus groups, which were professionally designed and administered. )

RULE NUMBER TWO:  When you are doing research on fundraising, and publishing about it, you really should know something about fundraising beforehand.

This second rule the researchers (and gurus) broke is my pet peeve.

U.S. fundraisers have known for years and YEARS that donors LIKE gifts that either (guiltlessly) reward them for making a gift, or (even more beneficial for the charity) allow them to take pride in their affiliation with the charity (like a coffee mug with a charity logo).

But if you offer them something unrelated to the charity (like a pen – what’s the connection between PBS and a pen?), what do you think will happen?  Or even worse, if you offer them a reward (winnings from a lottery, which plays to their greed) and at the same time ask them how much of their winnings they would donate to charity (which then asks them to think benenvently), and then ask them whether a thank you gift (greed) would increase their support (benevolence) – of course one conviction will “crowd out” the other.  It should not be a surprise they will SAY they will give you less, and in fact probably will.  That’s just bad marketing.

(Regarding lotteries, by the way, the researchers, and the gurus, obviously have never been to The Netherlands, and spoken to the people who run the Dutch Post-Code Lottery, which has raised more money for charity than any other single third-party organization in Europe, to the tune of billions of euros.  The don’t offer premiums, by the way.)

So, back to the real question: Does this study tell us anything new?

I say no.  Those of us who are good fundraisers already knew the relationship between gifts and, well, gifts.  And how do we know this?  Did we do a study?  No.  We’ve discovered this by putting something ELSE on the line: our jobs.  Its our job to know this.  And we know it by testing, and sharing our results.

To understand the basics of  “premiums” (as they are known in the business) I quote one of the founding fathers of American fundraising, Roger Craver, who once famously said, “Premiums are like crack-cocaine; once donors get hooked on them, you can never get them off.”

Which our testing has found to be…. true.    But wait? Didn’t the “study” show people would give LESS money if offered a premium?  (at least that’s what they say)?  Yeeeeeeeeeeessssssss.

So  isn’t it BETTER to get people to give to charity WITHOUT offering them a “premium” thank you gift?  Yeeeeeeeeeeessssssss .  Won’t those (non-premium) givers donate MORE over their lifetime, and more often?   Yeeeeeeeeeeessssssss.

So why does anyone still offer premiums?  Simple. Because testing time and time again has also shown that offering premiums will get MORE PEOPLE will give to your cause.  It’s a quantity vs. quality trade-off.  Do you want to be Burger King, or Morton’s Steakhouse?  Both businesses make lots of money.  Both are valid business models.  You have to decide which kind of charity business you are.  Or, if you are a really clever charity, you’ll get BOTH kind of customers, and take more money out of the market.  (IMHO, going for a high-value donor file is a better strategy, but not every charity can operate that way).

Marketing guru Rodger Dooley got it only half right when he said that thank you gifts should:  a) send a social signal (yes, that’s correct, giving is social, more on that below);  b) reframe the context (a fancy, MBA way of telling people that their thank-you gift helps the cause); and c) surprise them with the gift (which would only work….. once.  Next time, they would expect it.  Sorry, Roger, but, like “Duh”.)

So, is any of this NEW information?    Nooooooooooooooo.

This another example of a “study” of philanthropy by people who don’t understand philanthropy.  And I wouldn’t be so hot in the bonnet about this, except just last week, it happened again.

It started when I was forwarded an article about Facebook.  It appears, according to another study, done by economists (again), that people who have lots of “Friends” on Facebook are LESS likely to give to charity than those who have fewer Friends (makes you want to go clean up your Friends list, right?)

The theory (for what it’s worth) is that more Friends = more likely to assume (other) Friends will give to charity, and relieve you of the (implied) burden. (Of course, the study was not specific about what kinds of giving these other people actually do.)

The authors of the study had this to say about their thinking:

“Economists have traditionally viewed giving as an individual choice. It is time for a rethink – we are long overdue in asking questions about how social connections shape giving because the answers are important.”

You think?  :-)

Again, fundraisers have known this for years.  Many NGO’s have been using a “membership” model for decades, exploiting social motivation (asking individuals not to “give” but to “join”),  and now we have social media to apply (even more) social pressure, which allows groups like Avaaz to be successful, and effective.  You can instantly “join” with others, in massive numbers,  to affect change in places half-way around the world – it’s social media activisim. To me, its not counter-intuitive at all that more Friends = less “real” active engagement via social media.  The bigger the wedding, the less time the bride will spend at your table.

One last comment about the original “study”, the so-called “thank you study”.  It also showed that “free-miums” (putting a gift in a mail package BEFORE hand, when you are ASKING for a gift) do still work very well at getting people to make a first donation (the study did not even look at second gifts – apparently economists didn’t think that was relevant. )

So why wasn’t it entitled “Hey Charities – Send Your Prospetive Donors LOTS of Stuff in the Mail!  It Will Make You Rich!” ?

PS.  Here’s the story link from Psychology Today.  You decide.