Suggesting Low Gift Amounts Can Drag Down Fundraising Results, Study Finds

Fundraisers often suggest gift amounts to help guide donor decision-making. A new study on this practice, known as anchoring, suggests that low anchors may drag down giving more than high ones bring it up. Charities must find a balance when suggesting donation amounts, says Minah Jung, an assistant professor of marketing at New York University and an author of the study.

Anchors should depend on the charity’s goals, Ms. Jung says. While high figures may provide the greatest immediate fundraising results, a low anchor may be useful for organizations that want to increase awareness and attract as many new donors as possible, she says.

Study co-author Leif Nelson, a business and marketing professor at the University of California at Berkeley, urges caution, especially for nonprofits that need cash now as much as they need a bigger donor pool.

“The benefits of providing low anchors are fairly mild. But the detriment of low anchors might be substantial,” he says.

The Test

During “Pay-What-You-Wish Days” at San Francisco’s Cartoon Art Museum, the staff randomly offered one of four conditions to each group entering the museum: Pay what you wish; pay nothing or pay what you wish; pay a cent or pay what you wish; pay $5 or pay what you wish. At least 100 observations were collected per condition.

This study was one of 16 field tests and four lab experiments involving, all told, more than 22,000 participants.

Results

In general, low anchors influenced payments more than comparably high anchors. When given the choice between paying a penny and paying what they wished, visitors gave an average of $2.47 — a statistically significant difference from the $3.24 given by those who were not provided any suggested gift amount. Visitors given the high anchor choice of $5 gave only slightly more than visitors who were given no anchor.

Digging Deeper

Fundraisers weighing suggested amounts may find clues in their donors’ giving histories and by testing to determine what anchor will work best for their goal. The more they know about their donors, the better they can target them.

“If you’re not sure what a low anchor would be, don’t provide any anchor at all,” says Mr. Nelson. “And if you think the anchor you’re providing is low, change it. Low anchors can do harm.”