The Recognition Effect: Does Visibility of Generosity Really Drive Donations?

election-voteWith the Presidential election on everyone’s mind, NCM Network connected with DipJar, one of our business supporters, and received permission to share this timely post.


Voter turnout can be affected by neighbors seeing people’s voting records. Does the same apply to charitable giving?

I’m an economist at Wharton who studies generosity, so I frequently talk to nonprofit organizations about fundraising strategies. When I do, I often lead off with this story about a seemingly unrelated research study on voting conducted by researchers a decade ago:

In the months leading up to Michigan primary elections in 2006, a team of researchers ran an experiment aimed at increasing voter turnout. The experiment leveraged the fact that who an individual votes for is secret, but whether or not an individual votes during a particular election is a matter of public record.

As part of the experimental study, researchers identified over 180,000 households of eligible voters and randomized them to five groups. Three are worth describing here. The control group had their primary voting monitored but did not receive any intervention. A second group was sent a letter that served as a reminder to go to the polls on primary day and stressed that voting was a civic duty.

A third group got a similar letter reminding them to vote and encouraging them to do their civic duty. But, in addition, the letter contained their voting history from the 2004 primary and general election — along with the voting history in those elections of a dozen or so neighbors. These households were told that after the 2006 primary, another letter would be sent to all of the households listed with an updated voting record — a promise to each household that whether or not they did their civic duty and voted in the 2006 primary would be shared with their neighbors.

On primary day, the results came flooding in. The third group was significantly more likely to vote than the other groups — and the letters with the voting records were four and a half times more effective at increasing turnout than the standard reminder letter.

For anyone interested in encouraging charitable donations, this decade-old study on voting teaches a great deal about people’s motivations for acting generously. Like giving money or volunteering, going to the polls involves personal costs — the cost of gas to drive to their polling place, the time spent waiting on line — so many people don’t bother.

Voting, like charitable giving, is something people feel that they should do. The civic duty cited in the study bears similarities to the feelings people have about giving. Consequently, voting is an excellent proxy for giving, and motivations that encourage voting are great candidates (pun intended) to encourage giving.

What the experiment shows so clearly is that the households in the study care deeply about what others think about them. When the third group faces the prospect of their voting record being revealed, they rush to the polls. In doing so, they avoid the shame of failing to do their duty and replace it with the pride of doing so (and the knowledge that their neighbors will get a letter proving so).

These feelings — and being able to walk proudly around the neighborhood when the letter arrives — more than compensates for the costs of going to the polls. The force these researchers leveraged we call recognition, and it is quite powerful.

Many charitable organizations have already learned to leverage recognition. Giving circles recognize the donation amounts of individual donors — at least within a certain range — and research shows that individuals will adjust the amount that they give in order to get recognition for giving more.

Particularly powerful evidence for a recognition effect is that many donations are made at the lowest dollar amount in a giving circle range (for example, at $500 when the range is $500 to $999), since this is the least amount needed to get the same level of recognition.

Some charitable organizations recognize more than just the amount given. For example, the University of Pennsylvania, where I am a member of the faculty, recognizes alumni donors who give consecutively for 3 or more years in a row with a star next to their name in the annually published honor roll. Co-authors and I have analyzed data from a decade of giving, during which time, the 3-year consecutive donation program was introduced. In preliminary analysis, we find that the program provides an extra boost for alumni who have given two years in a row to give for a third year.

As you might suspect, the more public the recognition is, the more effective it is likely to be. In the voting example, the fact that the list of voters who voted provided by mail to neighbors is key. Even though voting records are public, if they’re buried somewhere on the Internet where no one is likely to find them, they’re unlikely to motivate behavior.

Honor rolls are mailed — or, nowadays, emailed — to alumni so they can see who is being recognized and know that if they give (and give consecutively), they will be recognized prominently in front of their peers. When individuals gift university buildings, build wings of hospitals, or endow cultural institutions, names usually appear prominently.

So when my brother, Ryder, founded DipJar, I offered insight from behavioral economics to inform the design of the DipJar donor experience. A DipJar lights up and plays a prominent sound after a supporter dips to donate, providing the recognition that motivates so much of our charitable giving.

As you look to encourage giving in a variety of settings, remember, there’s great value in recognizing the power of recognition.


By Judd Kessler, Assistant Professor of Business Economics and Public Policy at The Wharton School of the University of Pennsylvania and also an advisor at DipJar

For more information about DipJar, click for details: http://hubs.ly/H04z7W50

Disclaimer:
The views and opinions of authors expressed on NCM Network’s website do not necessarily reflect those of NCM Network. It is the intention of NCM Network to provide users with information to better understand PR, communications, social media, philanthropy, and more.

Image Credit: American President Election by Sailom via FreeDigitalPhotos.net

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