Maximizing Donations by Suggesting Individually-Tailored Donation Amounts: An Econometric Model of Anchor Influence on compliance and Generosity
Speaker
Abstract
| Fundraising organizations traditionally suggest donation amounts as anchors to influence donating behavior, but research reports ambiguous findings as to how these anchors influence compliance and generosity. We conducted a large field experiment in which a charity solicited 50,000 of its donors, tailoring suggested donation amounts based on the donor’s past behavior. Two anchoring values were manipulated: the size of the smallest suggested donation (relative to the previous donation) and the rate of increase across the other suggested donations. As hypothesized, increasing either anchoring value increased donation amount, but only increasing the smallest suggested amount reduced donation likelihood. We also find that donors with stronger internal reference points (those who made many donations in the past) are less influenced by donation suggestions. We then develop two econometric models to quantify the impact of suggested donation values on (a) donation likelihood and (b) donation amount. The results show that congruency between the suggested donations and the donors’ internal reference states increases donations. We then validate these models in a large field experiment where we individually tailor suggested amounts to 24,000 of the solicited donors. Relative to the control group, such tailoring increased donation amounts by 22% and net margins by 36%. |
| Contact information: |
| Dr. G. Liberali |
