By Lacie Blankenship
Nonprofit organizations often use various forms of public-facing recognition, from giving walls to galas, to acknowledge donations and encourage giving. New research suggests tactics like these may actually discourage the likelihood of donation.
In a recent study, Kelly Goldsmith, Professor of Marketing, dove into the complex relationship between incentives and altruism by studying the impact of motivators and social benefits (e.g., public recognition) on donations.
Her work, “Unobserved Altruism: How Self-Signaling Motivations and Social Benefits Shape Willingness to Donate,” aims to further understand what scenarios or incentives would incline a person to practice (or not practice) altruism to make a donation (money, time, etc.). The findings are particularly relevant for altruistic and mission-driven organizations but can be applied across the business world.
“Our research highlights an important problem with donation incentives,” says Goldsmith. “Managers’ may think that they will promote giving by appealing to consumers’ self-interest, but this ignores the reality that many people want to give for altruistic reasons (i.e., for the sake of giving) – they do not want to give to get.”
Goldsmith and her co-author, Jennifer Savary, Associate Professor of Marketing at the University of Arizona, found that offers of public recognition can decrease people’s willingness to donate a small amount of money. The reason, the authors explain, is that the possibility of public recognition creates ambiguity in the donor’s mind about their own motivation – are they donating for altruism or recognition?
“As a result, public recognition can crowd out, or undermine, the self-signal of altruism, which in turn decreases donation rates,” the authors write.
Nonprofits or organizations that are fundraising can take insight from this study and apply it to future fundraising strategies. For example, there is value in knowing that shoppers are more likely to make a modest donation at a store checkout if their contribution would remain anonymous, rather than be showcased on a store wall.
“Regardless of what cause an organization serves, it is powerful to acknowledge the finding that public recognition as an incentive to give can actually reduce giving in certain contexts,” says Goldsmith.
Goldsmith published another study on the topic of altruism in recent months as well. She worked alongside Uzma Khan of Miami Herbert Business School and Ravi Dhar of Yale School of Management on “When Does Altruism Trump Self-Interest? The Moderating Role of Affect in Extrinsic Incentives,” published in the Journal of the Association for Consumer Research.
“Unobserved Altruism: How Self-Signaling Motivations and Social Benefits Shape Willingness to Donate” was published in the Journal of Experimental Psychology: Applied.