Why people give

Why people give and why it matters

In the late 1980s, economists and statisticians tackled a question that philosophers had struggled for centuries to answer. By studying historical trends in donations, they hoped to show exactly what makes people give to charity.

Researchers like James Andreoni scoured donation data for tell-tale patterns indicating "pure altruism" (selfless acts of charity motivated only by their social impact). First, he looked for an effect called "crowding out", which occurs when donors give less to causes that also receive government support. Second, he explored the relationship between an individual's wealth and the proportion of their income donated to charity. His findings, shared in the Economic Journal, prompted some unexpected conclusions.

Traces of Homo Economicus

Andreoni's data showed that "crowding out" affected donor behaviour far less than pure altruism predicted. At the same time, his demographic analysis showed that individuals' generosity did not rise with their incomes as expected. Faced with these anomalies, he questioned the assumption that charity was driven by sincere (or "pure") altruism. Instead, he argued that social credit and personal satisfaction (described as a "warm glow") turn the act of donating into its own reward.

Subsequent generations of economists have embraced Andreoni's concept of "impure altruism", using it to explain the effects of new tax policies. However, despite adding depth to earlier economics, this shift in theory did not explain the motivations it described. Nor did it provide a reliable way to predict behaviour. To make sense of "impure" motives, as well as sincere philanthropy, fundraisers must look beyond economics.

Decoding the Selfless Brain

Rather than studying altruism through the mathematics of donation data, psychologists have looked for its signature in their field studies and brain scans.

In 1981, psychologist Charles Batson published a study questioning biologists' assumptions about what motivates charitable behaviour. Reversing Andreoni's challenge to "pure altruism", Batson sought to complicate the assumption that humans are selfish. Instead, he attempted to prove that charity could be motivated by empathy alone.

Batson's study gave participants the opportunity to switch places with a stooge (referred to as "Elaine"), sparing her from a series of electric shocks. The participants were split into two groups, one of which received information that helped them empathise with Elaine on a personal level. The participants were then forced to decide whether to watch the whole series of electric shocks or volunteer to receive some of the shocks themselves.

Only 20% of participants who had not empathised with Elaine chose to switch places with her. By contrast, over 80% of the empathic group (those who had made a personal connection with Elaine) offered to switch places and sacrifice themselves to spare her from the shocks. Batson attributed this effect to an "other-oriented" emotional state which formed the basis of a new model of selfless giving called "empathy-altruism".

Although Batson's results appear to conflict with Andreoni's economics, their findings mark opposite edges of the same complex subject. Approaching the question from different directions, both empathy research and economics challenged assumptions about why people give and revealed a more complicated answer.

These early findings have since been enriched by social psychology, fMRI, and statistical analyses of online behaviour, adding new dimensions to explanations of charity.

The fragile synthesis of psychology and economics is not stable enough to explain individual motivations or predict real-world events. However, isolated aspects of donor behaviour often reflect the theories and principles Andreoni, Batson, and others described. Because of this, charity marketing teams hoping to make the biggest possible impact must consider such research when designing campaigns and donor journeys. At the same time, psychology and economics have formed the foundations for a new kind of social research with more direct significance for marketing teams.

Behavioural Approaches to Charity

Following the extraordinary impact of publications like Richard Thaler's Nudge and Daniel Kahneman's Thinking, Fast and Slow, governments and multinationals have integrated concepts from behavioural science into all aspects of their work. In 2010, the UK Cabinet Office established a Behavioural Insights Team (BIT) to inform social policies. Similar organisations have been introduced throughout the world so that, by 2018, over 200 government bodies were actively implementing behavioural insights.

Behavioural researchers study decision-making in context and use concepts from psychology and economics to explain their observations. In this way, organisations like the BIT have revealed surprising truths about what motivates charitable giving.

For example, a behavioural study conducted alongside HMRC found that, when asking staff for donations in a "winter greetings" e-card, including an image of someone already giving to charity increased subsequent sign-ups by 220%. The experimenters explained this effect using the social psychology of peer influence.

Similarly, a BIT study arranged with the Home Retail Group produced a remarkable illustration of the "default effect". By reformatting the online fundraising form used by staff so that settings designed to protect recurring donations were selected by default, the study increased the value of staff members' charitable pledges by £3 million.

Rather than searching for a complete theory of altruism, institutions like the BIT draw strands from psychology and economics and use them to interpret real-world scenarios. Charities should embrace this work in a different way to previous research. Rather than defining theoretical concepts like "impure altruism" and "empathy altruism", behavioural research provides a methodological template for evidence-based marketing. The combination of theory, scientific methods, and real-world testing has produced radical insights wherever applied. It is the most reliable way for marketing teams to achieve returns on investment.

Why Motivation Matters

There is no objective framework for a good or bad choice of charity. That means personal motivations and context have a greater impact on donations than on everyday purchases. Despite this, charities have been slow to embrace the scientific methods (audience analysis, user research and A/B tests) that allow marketers to understand and influence their audience.

This reluctance is understandable since charities have a moral identity that can make strategic marketing feel cynical, but it does not stand up to scrutiny. Charities routinely spend between 5-20% of their annual budgets on fundraising, often more. When that budget is spent wisely, it helps to generate more funds for important work. When it is wasted, fundraising costs take money away from those who need it and the supporters who donated it.

Because charity marketers have a moral obligation to spend their budgets wisely, they must also think about what makes people donate. To do that, they must use insights from economics and psychology, applying them to real-world scenarios like behavioural researchers. In that way, the raw power of modern marketing techniques can be a force for good.

What makes donors care?

People donate for many reasons, but there is often something that makes one worthy cause seem more important than another. Psychological and behavioural research has identified five key factors that explain what moves a donor to support their chosen charity:

The five levers of charity

Empathy

Empathy is the ability to inhabit another person's experience. It involves specific brain structures which develop during childhood but can be learnt and enhanced later in life. In the late 1980s and early 1990s, Charles Batson's empathy-altruism model gained popularity as a correction to biological explanations of charitable behaviour.

How does it work?

"Empathy-altruism" describes an "other-oriented" emotional state that translates into sincere care for another's well-being. Crucially, it goes beyond the simple desire to avoid second-hand suffering.

Some factors increase empathy, whilst others have surprisingly little effect. For example, most people are more affected by the quality of a crisis than its scope; famines that affect millions can provoke the same emotional response as natural disasters that affect thousands. By contrast, meaningful information about a single victim significantly increases the emotional impact of a tragedy.

What does it mean for charities?

Charities that represent large-scale humanitarian causes or issues without an identifiable victim (such as environmental conservation) should use human stories to inspire empathy. Charles Batson's empathy research suggests that it can also be enhanced by highlighting similarities between the subject and the donor.

Liking

When surveyed, people claim they prefer to donate to charities with the greatest need. However, charismatic subjects (for example, endangered species like Giant Pandas) receive far more funding than other, equally important ones. Research suggests that, when acting on intuition, people prefer to donate to recipients that are in some way "attractive".

How does it work?

A well-known 1972 study identified a powerful "attractiveness stereotype". Strangers identified as beautiful are assumed to be more competent and well-adjusted than their peers. This effect also seems to apply to charity, where attractive causes enjoy a "beauty premium", whilst ignoring equally deserving causes.

Alongside this, many donors choose charities that have personal significance for them. University alumni may be expected to contribute to their alma mater, but few people would donate to universities they did not attend. This behaviour suggests that implicit egotism (a preference or liking for things associated with oneself) strongly impacts donors.

What does it mean for charities?

Some charities may be able to leverage their supporters' intuitive liking easily. On the other hand, charities with less charismatic subjects can attempt to block the heuristic associated with liking by encouraging more deliberative thinking. A simple way to do this is to challenge potential donors with unexpected or surprising content that disrupts their mental flow.

"Attractive" subjects generate more revenue

Charismatic subjects (for example, endangered species like Giant Pandas) receive far more funding than other, equally important ones. Research suggests that, when acting on intuition, people prefer to donate to recipients that are in some way “attractive”.

Proximity

Closeness to, or association with, an issue increases the likelihood that someone will take action. Surveys of social media content show how "psychological proximity" changes users' interactions with online campaigns. The reverse effect is also true, and the moral philosopher Jonathan Glover argues that the emotional distance created by modern technology has facilitated greater cruelty in recent history.

How does it work?

When a cause feels far away, people appear to be more willing to dissociate themselves from it. A comparatively imminent crisis, or one that is relatable, is much more likely to prompt action.

In the 1970s, Peter Singer wrote an article criticising the developed world's response to famine in East Bengal. The UK had donated just £14,750,000 in relief funds to support over 9 million people displaced by civil war and natural disasters (allegedly, over 30 times less than the amount set aside for Concorde). Singer argued that geographical and cultural distance had inhibited normal empathy.

What does it mean for charities?

Charities play a crucial role in bridging the real and emotional distances between people in need and those who can help. Visual media that locates an issue within the potential donor's world can have a powerful effect, as can literary devices that transport the reader to the point of need.

Values

Some moral beliefs appear to be universal and to motivate charitable behaviour. For example, "inequity aversion" is apparent across cultures and has even been observed in animals. Other values are equally motivating despite seeming to be culturally determined. Potential donors and volunteers are more likely to take action for a charitable cause that resonates with their fundamental values.

How does it work?

Studies have shown how theories of moral psychology, such as "moral foundations theory", can be used to predict responses to fundraising campaigns. However, whilst there is broad agreement that donors respond more positively to "congruent" appeals (messages that match their values and the structure of their beliefs), the psychology of moral reasoning is a contested subject. Because of this, fundraising campaigns must always be tested to find the most effective message.

What does it mean for charities?

Fundraising campaigns are most effective when their messaging targets a precise moral perspective. However, despite the vast promises of psychographic data and audience personas, it is not always possible to predict which message will resonate. Instead, charities should use audience research methods to understand their supporter's values and maintain a backlog of insights from past fundraising campaigns.

Narrative

Stories communicate details about characters, emotions, and causality that aren't conveyed by plain facts. Narratives about a charitable cause, or about how supporters can help, are powerful motivators.

How does it work?

Stories make information easier to digest and internalise. They also facilitate empathy by making abstract issues concrete and relatable. Alongside this, stories that give donors an important role to play can create new motives for giving. Research on "narrative identity" shows how individuals maintain personal histories that help them make sense of life events and choose what to do. Donors' self-narratives are likely to shape the charities they identify and engage with.

What does it mean for charities?

There are three stories that make up a compelling charity pitch:

1. About the cause and why action is needed

2. About the organisation and why it was created

3. About how the donor can help

If these narratives correspond to the donor's values and inspire empathy, the charity pitch is much more likely to motivate action.

How groups shape behaviour

Donors do not support charities systematically but instead rely on social cues to guide their attention, priorities and behaviour.

Social consensus

How groups shape perception

When someone is uncertain or lacks information, they are susceptible to influence from the majority perspective. This can shape even fundamental worldviews, which is why isolated groups develop extreme ideas. Because social context is missing online, visual cues that indicate engagement and activity (such as pageviews, comments, and reviews) are powerful signifiers of prestige or value.

Donors are influenced by endorsements from authority figures, social norms, and majority opinion. Visual cues that show a cause is popular, such as “likes” or notifications about recent activity, can dramatically affect the performance of online fundraising campaigns.

How does it work?

In 2013, the Behavioural Insights Team worked with the Co-operative Legal Services to show how social norms shape decisions about posthumous donations. During a will-writing phone call, simply mentioning that others had agreed to charitable bequests made people 42% more likely to do the same.

What does it mean for charities?

Charities must balance two considerations: consensus is important for demonstrating credibility, but donors may feel that their contribution is less significant if a charity is already well supported.

A simple way to retain the sense of urgency and reinforce the value of each donation is to split the fundraising calendar into periodic appeals with a modest target total. This action makes it possible to highlight the charity’s popular support whilst still creating momentum.

Peer effects

How precedents shape behaviour

People often encounter situations where the most desirable or polite behaviour is unclear. They will often use other people’s behaviour as a cue when that happens. This effect is especially powerful if the example behaviour comes from someone in authority.

Whilst consensus effects are largely unconscious, peer effects involve conscious choices about how to behave. Donation platforms like JustGiving and GoFundMe use elements like a live donation feed and a message board to help fundraisers leverage peer effects. Seeing friends or family contributing to a cause encourages donors to commit and establishes a benchmark for donation size.

How does it work?

Alongside HMRC, the BIT conducted a study on the influence of peer effects on staff fundraising campaigns. When an email with a donation request featured an image of an existing donor, the sign-up rate more than doubled - from 2.9% to 6.4%

What does it mean for charities?

By making previous donations visible, charities can encourage others to donate. This previous donor behaviour will help to create benchmarks for donation size, establishing an implied minimum amount.

Reciprocity

Giving as giving back

When people receive something positive, they feel obliged to return the favour. Charities sometimes leverage this principle by providing intangible gifts (such as a bag of sweets) in exchange for a donation. In other circumstances, donations may be conceptualised as a way of “giving back” in response to personal good fortune.

Social psychologists have identified reciprocity as an almost universal feature of human relationships, alongside similar mechanisms like fairness and trust. The desire to reciprocate occurs at both conscious and non-conscious levels and is one of Robert Cialdini’s 6 “principles of persuasion”.

How does it work?

In a study conducted alongside Deutsche Bank’s fundraising team, the BIT tested whether a small “thank you” gift would encourage the bank’s staff to donate (BIT, 2013). All staff members received an email asking them to donate a day’s salary to the fundraising team’s partner charities, but only half of the bank’s offices were visited by volunteers providing flyers and free bags of sweets. 11% of those in offices with the free sweets gave a day of their salary to charity, compared to 5% of the control group.

What does it mean for charities?

Using reciprocity as a persuasive technique allows charities to appeal to a broader range of donors in new ways. However, it is important to avoid turning charitable donations into a simple transaction.

One thing that is clearly highlighted by research on charity and reciprocity is the importance of thanking donors who have contributed.

The charity premium

Donors are highly sensitive to the proportion of a donation that does not go directly to the charitable output (the “charity premium”). A meta-analysis of surveys conducted between 2005 and 2016 shows that most donors cite evidence of impact and “how donations are spent” as reasons for choosing one charity over another (Wong and Ortman, 2016).

Whilst donors seek to reduce the charity premium, they also regard searching for information as part of the overall cost of a donation. Because of this, heuristics and rules of thumb play a significant role in how people judge the efficacy of an organisation. For example, donors will often choose well-known charities because they assume the money will be spent wisely. Similarly, donors strongly prefer charities with a high proportion of volunteers.

How does it work?

A study conducted at the Stanford Economics Research Laboratory in 2014 compared participants’ attitudes to risk when either investing money or donating to charity. The difference between participants’ approaches in those scenarios suggested that reluctant donors may use uncertainty about an organisation’s efficacy as an excuse (rather than a reason) not to donate.

What does it mean for charities?

Charities must be transparent about how they spend donations. Keeping the charity premium low is an effective way to earn more donor support. This fact also means that, contrary to expectations, highly polished marketing content may reduce the impact of fundraising campaigns. Important sources (these stay the same)

How donors think about money

When people are thinking about donations, normal economic rules do not always apply. Fundraisers must be sensitive to the unique ways in which donors think about money and value.

Anchoring and adjustment

What donations are relative

Most donors aren’t sure how much to give. Because of this, they will seek a reasonable benchmark and adjust up or down depending on how they feel. Whilst the “anchor” may be arbitrary, it dramatically impacts the size of the eventual donation. By providing high, yet plausible, anchor values, fundraisers can encourage more substantial contributions from their supporters.

When the value of something is abstract or difficult to calculate, most people use comparisons to arrive at a reasonable figure. For example, when judging the value of an exotic holiday, someone might use the cost of a less extravagant holiday as a benchmark.

How does it work?

Retailers use anchoring to encourage customers to spend more. For example, displaying expensive luxury items next to cheaper, best-selling alternatives reduces the perceived cost of those products. Similarly, discount retailers often show the original price more prominently than the discounted price.

What does it mean for charities?

Many charities provide prompts for people who don’t know how much to donate. This is most often the case with online donations, which typically offer a set of suggested amounts. By experimenting with the order and range of these prompts, charities can identify which combinations establish the most effective anchors.

Separate mental accounts

How donations fit into budgets

Most budgeting happens in people’s heads. Because mental arithmetic and rate-of-change calculations are difficult, people simplify this process by splitting their finances into separate accounts (one for the weekly shop, another for a night on the town, and a separate one for savings). These accounts make it easier to keep track of money and help people resist the urge to spend their retirement funds (Thaler, 1990).

Depending on which account is most relevant, people follow different spending rules. For example, few people would spend the same amount on snacks in the supermarket (which comes under the weekly budget) as in a cinema (which is budgeted as a special occasion). However, donors are not always sure which account to place their charitable donations in. The way people incorporate charity within their mental accounts greatly impacts the amount they are happy to spend.

How does it work?

Charitable donations do not fall into an obvious financial category. A regular donation can feel extravagant when viewed as a domestic expense (alongside food and other essentials). By contrast, a small monthly gift that creates real-world impacts can seem like fantastic value when placed alongside hobbies or subscriptions.

What does it mean for charities?

Understanding and influencing how supporters think about monthly donations is important for long-term retention and revenue. Donors should be persuaded that their contributions are equivalent to a restaurant meal or a new pair of shoes, rather than comparing them to everyday essentials.

Framing

The way information is “framed” has a significant effect on how it is perceived. The same thing can appear radically different depending on the context (circumstances, associations, and perspective) in which it is placed.

In a situation where two equally appealing t-shirts cost the same amount, but one has been discounted from a higher price, most people will feel happier purchasing the discounted one. This behaviour happens because the two options are placed in different frames, and each includes the previous price.

How does it work?

Framing donations effectively is crucial to fundraising campaigns. Suppose someone who gives £10 to a humanitarian charity compares their donation to a £10,000,000 gift from a corporate sponsor. In that case, they may decide that the money is more valuable to them than the charity. However, if the same person compares their £10 donation to the lifesaving food or water it could provide, they are more likely to commit to it.

What does it mean for charities?

Charities must be sensitive to how fundraising campaigns frame their activities and supporters’ contributions. For example, setting discrete, short-term goals and raising funds to support those activities may be more effective than launching continuous appeals to support a familiar historical cause.

Framing issues in an unexpected way can also form the basis of effective campaign messaging. Alternatively, many charities have experimented with unusual ways of framing donations, such as asking people to donate a day’s salary.

Distance discounting

Why future donations are more generous

The value of a cash incentive is significantly reduced when there is a delay. Similarly, many people are willing to commit to larger financial commitments when they can defer the payment until a later date.

Most people are more deliberative when considering future expenses than they are when addressing immediate costs. The direct emotional impact of making a payment is also less substantial when there is a delay before it occurs. Because of this, it’s possible to persuade supporters to commit to future donations more easily than immediate gifts.

How does it work?

The value of a monthly donation decreases over time due to inflation. To solve this problem, the BIT conducted an unusual experiment with the Home Retail Group’s staff fundraising program. Donors were asked to commit to a regular increase in the value of their monthly donation. This small change resulted in millions of pounds of additional funds for the Group’s partner charities.

What does it mean for charities?

Giving donors the option of adding a “future lock” on their donation to keep up with inflation is a simple way of using time preference to compensate for the natural depreciation of donated funds. Alternatively, asking supporters to commit to a regular donation beginning at a future date may have a higher success rate than asking for one immediately.

What donors expect to see

In recent years, the most successful fundraisers have invested time and effort in improving their impact reporting. Demonstrating the value of a donation more clearly makes donor acquisition easier and increases retention.

Creating virtuous cycles

Making giving addictive

Making outcomes more tangible increases their relevance to supporters’ behaviour. For example, being specific about what a donor’s contribution means to the recipient and then showing pictures that demonstrate this impact significantly increases the amount people will give to something they care about. Making social impact more visible also creates a virtuous feedback loop, helping to increase donor retention.

Social media giants and video game designers have become experts at building feedback loops that make their products addictive. The same is true with sugary foods and luxury products, which create a cycle of advertising, experience, and craving. Charities can use this powerful operant cycle by making each donation as rewarding as possible.

How does it work?

Providing evidence of the real-world impact of a donation can maximise the “warm glow” experienced by donors, reinforcing the behaviour and encouraging future donations. Reinforcement can also be incorporated into the donor journey through “gamification”. Apps like Duolingo use gamified features to encourage users to remain engaged.

What does it mean for charities?

Charities need to make the impact of donors’ contributions as tangible as possible. Doing so will persuade one-off donors to make regular contributions and reduce the attrition of regular donors.

Objection management

Why transparency is essential Many people use mistrust of charities as an excuse not to give, and these people may even discourage others from donating. Because of that, impact reporting is an essential part of charity marketing.

If donors have doubts about the impact of their donations, they are likely to give less and less frequently. Over time, these doubts can erode confidence in a charity and its brand. Because this uncertainty poses such a severe threat, marketing teams should prioritise activities that make their organisation’s impact visible.

How does it work?

In the aftermath of September 11th, 65% of Americans made online donations to charities supporting the victims. In particular, the American Red Cross received £650.5 million in donations ($988.8 million) and a vast quantity of blood donations. However, months later, the charity’s president Bernadine Healy was forced to resign due to allegations about the misuse of funds.

Whilst there were no suggestions of corruption, donors objected to the use of emergency appeal funds to support unrelated long-term initiatives and infrastructure projects. The reputation of the American Red Cross, and of American charities more generally, was severely damaged. In the age of digital donations and online public relations, charities need to provide transparency about how they use donations.

What does it mean for charities?

To retain public trust and prevent reputational damage, charities must be clear about how they spend public donations. This transparency is fundamental to building public confidence in the long term.

The moral burdens of charity marketing

Why promoting non-profits is a balancing act

Charity marketing teams are pulled in many different directions. Two conflicting pressures influence almost every decision about budget and strategy.

On the one hand, charity marketing has a moral identity; donors must give and do it for the right reasons. The hyperbole, fetishism, and high-pressure tactics used in commercial markets simply don’t wash.

On the other hand, non-profit and charity marketing teams have a moral obligation to deliver a return on their investment. Every click and inch of advertising space bought on behalf of a charity represents money that could have been spent delivering social impact. Because of this, marketing performance directly impacts some of the most vulnerable people in the world.

To reconcile these competing moral obligations, charity marketers must understand their audience at a very deep level. Only the most precise empathy allows them to build campaigns that persuade the right people to donate for the right reasons.

That understanding also helps marketers find a space where they can operate without taking funds away from other worthy causes.

Insights from psychology and economics can help marketing teams ask more searching questions about their audience’s motivations. However, these insights must also be supported by evidence-based methods. When it comes to non-profit and charity budgets, measurement and experimentation are not just best-practice: but moral requirements.

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