The Theory
Do people reward charities that scrupulously work to lower their fundraising and administrative costs? Not necessarily, according to a working paper written by group of behavioral economists who tested donor responses to paid solicitors.
The researchers speculated that the use of paid fundraisers might turn off potential donors who think the money could be put to better use funding charitable programs. They also thought donors might have warmer feelings for people providing free labor for a cause, according to one of the report’s authors, Anya Samek, an associate professor at University of Southern California.
“We thought people might feel more empathy toward the volunteer and reward people by donating,” she says. “But that’s not what we found.”
In fact, donors — particularly women — responded better to fundraisers who acknowledged they were being compensated.
The Test
The researchers tested their theory using 17 undergraduate students to raise money door-to-door for Family Voices of Wisconsin, which serves children with disabilities and special health-care needs. They employed several fundraising messages on 1,037 potential donors to test the results when students were paid or worked as volunteers, and whether it made a difference if they revealed this information in their pitch.
Results
Donors barely budged when the students told them they were volunteers. But when the students said they were paid, not only did donors give more frequently, the average gift size increased by about 16 percent.
Why? Another co-author, Uri Gneezy of the University of California at San Diego, says people are often leery in situations where money is exchanged, assuming the other person has a self-interested motive. By openly acknowledging that to be at least partially the case, a paid fundraiser defuses the suspicion and disarms the donors.
“When people try to sell us something or get our money, we don’t really know what their hidden motives are,” he says. “When they say, ‘I’m being paid for this,’ it increases the trust.”
Digging deeper
Most of the increase in donations came from women, who gave 88 percent more when told that the fundraiser was paid. The researchers say more work is needed to determine why women responded so well to the compensation information.
Find it
“Do I Care if You Are Paid? A Field Experiment on Charitable Donations” is a working paper by Uri Gneezy, University of California at San Diego; Holger Rau, University of Mannheim; Anya Samek, University of Southern California; and Lilia Zhurakhovska, University of Duisburg-Essen.
