The Purity of The Nonprofit Fundraiser

Posted by Laura Otten, Ph.D., Director on January 6th, 2017 in Thoughts & Commentary

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If only we all had a big red kettle recognized all over the world that Dallas Cowboy running back Ezekiel Elliott, an amazing player to watch and a leading candidate for NFL Rookie of the Year, could jump into and pop out of and garner the Salvation Army a 61% increase in donations.  This trumps the ice bucket challenge, as this wasn’t even planned!  It was just spontaneous celebration—for which Elliott got a penalty.  The charity earned lots of dollars, many coming in increments of 21—Elliott’s jersey number—and a $21,000 donation from Elliott himself.

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As nonprofits around the globe count up their year-end donations, all the while fingers crossed that there will be celebrations of their own when all is tallied, there just may be a lesson in Elliott’s act of spontaneity that all of us should take into the new year as we plan for this year’s fundraising efforts.

New research out of Texas A&M University shows that despite recovery from the recession, Americans were giving 6% less in 2012 than they gave in 2000.  The authors suggest that the frugality necessitated by the Great Recession has carried forward; others suggest that it may be a diminishing lack of faith that their dollars are making a difference.  Talk to almost any nonprofit employee and they will tell you:  dollars are getting harder to find and win.  So, we need to get even smarter.

Enter interesting research by three academics in the business schools:  NYU, London Business School and Penn.  I was pulled into this paper by the title:  “When Payment Undermines the Pitch:  On the Persuasiveness of Pure Motives in Fund-Raising,” having, once again, been recently asked if it was okay to pay a director of development on commission or a bonus, based on the amount raised.

The answer is no, and I gave my usual explanation of code of ethics, the reward is the mission, etc.  This headline, though, made me think that perhaps there was an even more compelling argument that would speak the same language as those who are able to ask the question in the first place:  does paying people an incentive to raise money impact the amount of money raised?  This research says absolutely yes!

The scientific rigor of this research is impressive, giving it great credibility.  Through three different experiments, each essentially the same but with ever-increasing numbers of participants, the researchers looked at how providing a self-serving incentive to a passionate advocate before s/he crafts the pitch impacts the amount of money the potential donor.   The researchers recruited individuals who were known to be passionate about different charitable missions and invited them to create (with the help of a video assistant), on the spot (no preparation), a short video (no more than five minutes) appeal for the charity of their choice.  These advocates knew that their videos would then be shown to potential donors in hopes of securing donations.

In the first, and smallest of the experiments, all of the would-be fundraisers were asking for money for a nonprofit that supports breast cancer research and awareness.  Right before the videos were to be made, half of the individuals were told that they could receive $1 for every $10 that their video raised; the other half were not offered such an incentive, thus making their motives “pure.”  The videos of all advocates were blindly analyzed by independent reviewers, and the results showed no differences in pitches of the two groups:  they were of comparable length and there was no difference in those who mentioned a personal—be it family member or friend—connection to the missions.  In addition, these blind reviewers judged those who had been offered an incentive to be less sincere than those who had not been offered an incentive.  And the donor subjects apparently saw the same thing:  donations to those who had been offered an incentive were 40% less than what was received in response to the appeals made by those who received no incentive. (And, as added support for the strength of this research, the researchers thought to check whether being offered an incentive raised the stakes such that those with an incentive felt more nervous and/or less confident in making their pitch.  The would-be fundraisers self-reported no differences in their comfort level and self-confidence.)

The two subsequent iterations of these experiments were larger in numbers and included advocates for many different missions.  But the results were the same.  There were no differences (length and personal connection) in the videos of those who were given an incentive and those not. Blind reviewers found the videos of those offered an incentive to be less sincere than those who were not, and so did the would be donors; and those who had been offered an incentive garnered fewer donations than those who had not been offered an incentive.

The third experiment, larger than the second one, did all of the same things, as noted above, but added a twist, with a third condition.  Some of the would-be fundraisers were not offered an incentive; some were offered a personal incentive; and some were told that every dollar they raised would be matched to the organization.  Now, there were two different kinds of incentives:  one selfish, the other still “pure.”

What the researchers found is very telling:  the amount of dollars raised by those offered a personal incentive were, once again, less than those who received no incentive, but there was no difference in the dollars raised by those who received the incentive of a gift match to the organization and those who received no incentive.  In other words, received when the request to give was made by someone who was truly altruistic, donors gave more money.

Experience has shown me that most people in the nonprofit sector are most successful when they are working for a mission, not for themselves.  This research affirms that conclusion.  We should all heed these results.

 

The opinions expressed in Nonprofit University Blog are those of writer and do not necessarily reflect the opinion of La Salle University or any other institution or individual.

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