Casual Fridays: What charity gimmicks are most effective?

With hundreds of seemingly worthy charities out there, how do we decide which ones to donate to? Even if we eliminate charities that aren't effective, there are still too many choices, and too little money, to donate to all of them. In the Donors Choose campaign, bloggers are going to impressive lengths to coax their readers into giving. But do incentives such as this really work?

We asked our readers, and 261 of them responded. That's the lowest response rate we've had this year, suggesting that many readers aren't much interested in charity, even when motivated by a cute photo of a child.

Still, even among those responses, we found some interesting results. First off, let's take a look a the comparative merits of a few charity marketing strategies:

Clearly asking your friends and family members is the absolute best way to get donations, crushing all other methods by a factor of at least five. But eventually we all run out of friends to ask (perhaps because we ask too often). So what other methods are most effective?

Let's start with the least effective: telephone calling. An average of just $1.82 per person was donated. But even that low figure points to why telemarketers still try to get us to donate: 8.8 percent of respondents said they would give something to a charity they liked via the telephone. And based on our figures, it would only take 30 calls per hour to generate over $20 of income. Even if the telemarketers get to keep half of the income they generate, it's still a net positive for the charity.

The most effective strategy other than contacting friends and family was a child going door-to-door, who can earn an average of $8.13 per home visited, with 71 percent of people saying they'd give something to a child.

Adding a small amount to a grocery or restaurant bill was also quite effective, with close to fifty percent of respondents giving something using that method (although one of our commenters said they would donate, then refuse to visit that restaurant again. Yikes!).

But what incentive would encourage a donor to give more than they would otherwise? Here's what we found, for a variety of incentives:

These were scored on a scale from -1 (less likely) to +1 (more likely). As you can see, only matching gifts proved effective (e.g. when a corporation or other donor offers to "match" the amount of an individual's contribution). Interestingly, both limited and unlimited matches were effective -- even if a company's matching gift is capped at a certain amount, significantly more people still say they will give more to a cause than they normally would.

But incentives might work differently for different people. Some people might prefer to get a gift as a reward for their donation, while others might not. Some incentives might actually discourage donating, since donors might see a charity as wasteful.

We asked respondents to report their income, so we could then correlate income with the various incentives for giving. We found no significant correlations except in two areas. There was a moderate positive correlation (r=.27) between income and the amount a person donates the first time they give to a charity. There was a small negative correlation (r=-.16) between income and the amount people would pay for candy in charity fundraisers. Apparently you'd be better off selling candy bars for charity in a lower-income neighborhood than in a wealthy neighborhood.

But what about the people who give the biggest donations? While there's a correlation between donation size and income, donation size was associated with many other phenomena. Donation amount was negatively correlated with several different incentives for giving, including a $5 gift, a 1 in 5 chance of winning a $5 prize, and a 1 in 500 chance of winning a $500 prize (r≅-.20). Larger donors were also significantly less likely to participate in charity auctions. The people who give the most, it seems, don't really need an incentive to donate.

So who likes these incentives? To find out, we created an "incentive score" where we added all the responses for each incentive, for each donor. Then we looked at what correlated with the incentive scores. As you might expect, the incentive score itself correlated with every incentive for donating. There was a negative correlation (r=-.21) between donation amount and incentive score. People with high incentive scores were more likely to make donations that were added to grocery bills and restaurant tabs, and more likely to respond to door-to-door solicitations. So among people who respond to incentives, it appears that almost any incentive will work -- it just won't result in as large a donation. But how do you figure out who's responsive to incentives?

Our survey didn't find the answer -- even income doesn't correlate significantly to incentive score.

One thing we did learn from this study is that matching funds really do work. With that in mind, Greta and I are going to change the way we're handling matching funds in our Donors Choose challenge. Instead of holding off until we reach our goal, we're going to match 10 percent of every donation up to $6,000. That way you can be assured that whatever you donate, you'll not only be matched by Seed's gift, but your gift will also be augmented an extra 10 percent by us!