Give if you win: Research with impact

'Give if you win': details

Millions of employees anticipate end-of-year bonuses, particularly in the financial sector. Before the bonuses are announced many are uncertain whether they will get a bonus, and how large it will be. For example, in 2014-15 UK bonuses totalled £42 billion. In the wake of recent financial turmoil these bonuses are coming under increasing public scrutiny as politicians call on bankers to “palliate their guilt” and give their bonuses to charity. While the banking sector is no stranger to charitable giving it can seem that a celebrity’s $1000 tip will get more public recognition than a $100 million development project. High-profile ‘give if you win’ initiatives may help make the bonus culture more socially acceptable: when bankers succeed, so will charities. This is a win-win situation: bonuses are a ripe target for fundraising, and banks are eager for better press. So how should charities and professional fundraising organisations go about this?

In particular, should they ask bankers in advance to commit a share of ‘their bonus in excess of expectations’ or should they wait and ask until bonuses have been revealed?

There are strong arguments – and significant evidence – that, in certain environments it would be better to ask conditionally, and in advance.

David Reinstein and co-authors have run several experiments to compare differences in charitable giving between two key environments. Participants had a ½ or ¼ chance of winning a (£5 - £20) prize, and asked to donate under one of two conditions, either,

1. asked to commit to donate if they won, with the donation automatically deducted from the prize or
2. asked to donate after they found out they had won the prize/bonus.

The results were similar in both a lab experiment and a field experiment involving a student employability promotion: Overall, participants committed to donate more in the first condition than in the second condition.

This is consistent with previous behavioural economics work suggesting:

1. people quickly adapt to, and are reluctant to part with ‘money in hand’,
2. are more generous with less tangible income and wealth, and
3. pursue reputation and self-esteem by committing to behave pro-socially in the future.

Example design

Fundraisers make specific appeals to employees who anticipate an unknown potential bonus being revealed and awarded at a certain time, e.g., 25 December. We will assign employees (randomly) into three groups.

A1: ‘Give from known bonus’: These employees are asked on 10 January, after they know their bonus, to donate a portion of it, to be collected in one week (17 January).

A2: ‘Give known bonus in 3 months’: Asked on 10 January, after bonus is learned, to donate a portion of it, to be collected in three months.

B: ‘Give from unknown bonus in 3 months’: Asked on 10 November (before they know what their bonus will be) to pledge a portion of their unanticipated potential bonus, conditionally on the size of the bonus, to be collected on 17 January. Depending on feasibility, (i) the committed amount could be directly and automatically deducted from any bonus, or (ii) the employee could merely be reminded of their previous commitment after receiving their bonus.

Anticipated questions (FAQ)

How will the administrative costs of this be funded?

Participating organisations are not expected to contribute directly to fund this pilot. The main source of funding will be an ESRC Impact Acceleration fund.

What charity are you fundraising for?

This can involve any charity that your organisation is supporting and enthusiastic about.

Will you need access to private employee data?

To analyse this properly, we would need only minimally-descriptive data: the group assigned (A1, A2, or B), and the amount donated, from each individual. Any data we would analyse would be stripped of identifying information, and made otherwise unidentifiable.

I am interested in trying this, but I don’t want to run a trial. Can you help me?

Yes, David Reinstein and the University of Exeter are eager to speak with your organisation about how you can benefit from this research and this idea, whether or not you are willing to pursue an experiment or a controlled trial.

Has anything like this been done before?

A range of prominent economists and social scientists have worked with firms, fundraisers, and charitable organisations to investigate and measure ‘what works.’ These have yielded highly interesting and practical results. For example:

• Dean Karlan and John List worked with a prominent US nonprofit to run an experiment involving a major mail solicitation to over 50,000 prior donors. They found that the presence of a ‘matching grant’ from a third party boosted response rates by about 2% and revenue per solicitation by about $1, but increasing the match rate did not have any additional effect.
• Steffen Huck and Imran Rasul worked with on a postal fundraising campaign sent to 24,000 regular attendees at Bavarian State Opera House. Their result: “if charitable organizations can use lead gifts as they wish, our results show that they maximize donations given by simply announcing the presence of a lead gift.”
• Anna Breman worked with two development charities (Diakonia and Save the Children) running a telephone solicitation in Sweden, involving 7710 existing regular donors. Result: Asking donors to increase their donation amounts starting in two months–rather than immediately–led to a 4% higher success rate and £0.50 more raised per month per donor.

What is your experience with this?

Before joining the University of Exeter as a Senior Lecturer in Economics David Reinstein lectured at the University of Essex, where he helped found the ESSExLab and served as Lab Director. He has run laboratory and field experiments in the USA, UK, and Germany, including working with the Behavioural Insights Team, the Brixton Pound, Mid Essex Hospital Services NHS Trust and the HMRC. He has presented this and other research at a variety of venues and conferences, for academic, industry professionals, and policymakers, including the University of Oxford, the EC-JRC Vaccination Workshop, the ESRC ‘Generosity and Well-Being’ workshop 2013, the Royal Economics Society, at the British Academy ‘Nudge and Beyond’ workshop.

I am interested in trying new fundraising techniques, but not involving bonuses or winnings. What other tools can I use or test?

Recent work supports several innovative approaches and offers avenues to test, including:

• Variations in the social environment, anonymity, and potential for recognition for donors; particularly making individual donations public, by default or by ‘opt-in
• Offering donors tangible impact, influence, and choice over how their funds are used
• Optimising the timing of charitable asks (does one appeal crowd out another?)