Round Giving: A Field Experiment on Suggested Donation Amounts in Public‐television Fundraising

Abstract

Direct-mail fundraisers commonly provide a set of suggested donation amounts to potential donors, in addition to a write-in option. Standard economic models of charitable fundraising do not predict an impact of suggested amounts on charitable giving. However, our field experiments on direct-mail solicitations to over 10,000 members of a public television station tell a different story. We find that changing one of the suggested amounts in an ask string from $100 to $95 reduces the number of gifts greater than or equal to $90 by more than 30%. This contrasts with our finding that in three independent comparisons, increasing the entire vector of suggested amounts by 20%-40% reduces the probability of giving by approximately 15%, with little effect on the average size of the gift. Both manipulations lead to a larger proportion of write-in donations, even as they reduce the number of total gifts. We propose a simple behavioral theory to explain the data: many donors prefer to give round numbers, and donors incur a cognitive cost when choosing to give a nonsuggested amount. (JEL C9, H4)

Point at, nudge, or push private provision of a public good?

“…Especially since intrinsic motivation can change over time, possibly in response to defaults. In combination with our findings on an interaction with donors' intrinsic motivation, this suggests research on machine learning algorithms setting personalized default values may be promising (Mills, 2020;Peer et al, 2020;Sunstein, 2013;Yeung, 2018), but also challenging (Reiley & Samek, 2019). Based on available donor information, defaults could be set so as to maximize the probability of realizing the highest possible contribution to the charitable organization, or environmental cause.…”

Defaults and Donations: Evidence from a Field Experiment

“…Specifically, to the extent that potential donors interpret the default option as a recommended contribution to the charitable cause, our paper is related to studies that examine how giving is affected by directly requesting (Fraser, Hite, & Sauer, 1988;Edwards & List, 2014) or explicitly suggesting (Adena et al, 2014;Goswami & Urminsky, 2016) specific donation levels during solicitation. Similarly, the literature on "appeal scales" (i.e., providing donors with a vector of multiple suggested contribution levels; see Weyant & Smith, 1987;Desmet & Feinberg, 2003;Adena & Huck, 2016;Reiley & Samek, 2017) is related in that there is a partial overlap in the channels through which appeal scales and defaults may affect behavior (e.g., recommendations or anchoring). Finally, interventions based on statements like "every penny helps" (Cialdini & Schroeder, 1976;Fraser, Hite, & Sauer, 1988) or the provision of information about other donors' behavior (Frey & Meier, 2004;Shang & Croson, 2009) are potentially related to defaults, as they may also affect behavior by transmitting information or shaping social norms.…”

A literature review of experimental studies in fundraising

“…Suggested Ask Amount. Several experimental studies have focused on the relationship between suggesting an amount to give, and the resulting behavior (De Bruyn & Prokopec, 2013;Edwards & List, 2014;Fielding & Knowles, 2015;Goswami & Urminsky, 2016;Reiley & Samek, 2019). In one study, Edwards & List (2014) asked US college graduates to donate to their alma mater.…”

“…However, fundraisers may want to keep the suggested amounts in multiples of $5 or $10, as donors seem to prefer round numbers, and it is easier to give a suggested amount than to pick another one. In fact, response may be suppressed if "strange" numbers are suggested, because it is easier to not give than to write in one's own amount (Reiley & Samek, 2019).…”