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How the Theory of Reciprocity Encourages People to Donate More

December 3, 2013 Comments

Reading Time: 3 minutes

CausoraGuest post by Kai Buehler, CEO & Co-Founder at Causora

Nonprofits have been long struggling with the age old question: How do you get people to give more? From solicitations in the mail with free return address labels, to commercials with hungry children or homeless puppies that pull at your heart strings, charities have tried it all. Researchers have been studying the issue and they’ve found that some gifts work well, while others, like little trinkets, do not incentivize people to give. Here are some insights on giving we’ve come to understand as we build Causora, a one-for-one giving platform that rewards donations.

Studies show that one way to get donors excited and to come back is to reward them with small gifts that are related to the nonprofit’s mission statement. Describing thank-you gifts not as rewards, but as a means of furthering the charity’s goals, also works well. For example, a mug or tote bag that has the nonprofit’s logo printed on it to raise awareness for the cause allows the donors to feel that they are helping the charity by accepting the gift.

Secondly, public recognition of donations continues to be an effective strategy to drive donations. Gifts that send a social signal about the donor like tickets to exclusive galas and auctions may positively affect the propensity to donate.

Another interesting study was conducted by the German researcher Armin Falk who looked into the size of gifts and the reciprocity effect. As a social construct, reciprocity suggests that in response to receiving something or benefiting from a favor, people tend to feel a subtle return obligation and might be more inclined to donate, and Falk’s study concluded that a bigger “gift” amplifies the readiness to donate. His study was comprised of 10,000 requests for charitable donations that were sent to three groups: Participants in the first group received a letter asking for a donation, the second group got the letter and a free postcard and envelope (“small gift”), whereas the last group received a package with four postcards and envelopes (“large gift”). The study showed that the group who received the small gift donated 17% more while those with the large gift donated 75% more than the no-gift group.

Taking these findings one step further, Causora is a new one-for-one giving platform that has hit on a way that allows charities to reward donors with significant rewards (no return address stickers or tote bags) while tying the gift to altruism, a feeling that increases giving. Causora’s online platform allows you to give to your favorite nonprofit and in exchange, receive a gift card from socially conscious merchants for the same amount (eg. donate $20, get $20 to spend). Nonprofits can sign up for free and will receive over 90% of all funds generated on the platform.

Here’s how Causora works like a ‘loyalty program for charitable giving’:

1. Causora users donate to their favorite cause, choosing from over 200 charities including the Red Cross, Water.org, Habitat for Humanity, Boys & Girls Clubs, and Amazon Watch.

2. Users receive the same amount in Causora credits that never expire.

3. Users redeem their Causora credits for exciting rewards like restaurants vouchers, spa visits, wine, flowers, Zipcar credits, or a GOOD magazine subscription.

The rewards are donated by socially-conscious merchants who believe in giving back, so donors can feel good about supporting both their favorite charity and these merchants, while also getting a reward for themselves or their friends. By leveraging the power of human altruism, reciprocity, and sense of community, we can re-imagine and re-scale philanthropy.

For more information about the author and Causora, go to www.causora.com

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