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📝 Intro

Charities in the US received a total of $450 billion in 2019, equivalent to 2% of GDP. 69% of this amount was from individual donors (data from Giving USA, 2020).

But the top 100 US charities spend on average $0.11 to collect each $1 in charity they receive (according to Forbes, 2016). In other words, that’s the average cost to acquire donations.

What if we can increase the conversion rate?

That would mean that much more money reaches the end receiver in need, instead of going into ads or outreach.

For example, assume we reduce the average cost to $0.095 (vs $0.11). That’s an extra $0.015 per dollar donated that goes to the cause. Scale that, and it becomes an extra $6.75 billion in charity in the US alone. That’s roughly the yearly budget of the Bill & Melinda Gates Foundation - the second largest charity in the world.

Well, here’s the great news.

Scientists found a way to do this. And the best part? It’s incredibly easy.

It’s up to you now to put it to work.

P.S.: Make sure to share this with all your friends working at charities and NGOs so that we maximize the impact of this research.

P.P.S.: Thank you Robin Good for helping spread the word about Ariyh! Check out his newsletter TRUST-able if you want to learn how to improve your personal brand ;)

Previous insight: Handwritten thank you notes increase sales (100+ more insights here)

Gift framing (vs donation framing) increases charity giving

Channels: Donations | Marketing communications
For: B2C
Research date: September 2022

📈 Recommendation

When asking people to donate to a charity, frame the ask as a “Gift”, not a “Donation”.

For example, “Gift to children in need”, not “Donate to children in need”.

People will be more likely to donate and will donate more.

Important: Don’t mix it or use it interchangeably with “donate” in your messaging. That will cancel the positive effect. Use gift framing exclusively and everywhere.

🎓 Findings

• Asking people to “gift” - rather than “donate” - to charity, increases how likely they are to give and how much they give.

• For example, as part of 6 experiments across people in the US, Europe, Hong Kong, and mainland China:

  • People donated 25.1% more (HK$8.38 vs HK$6.70) to the charity For Children when they were asked to “Gift” rather than “Donate” (e.g. in charity descriptions, on envelopes)

  • 21.8% more employees at a company donated used books (53.5% vs 31.7%) when the email asking them was framed as “A gift to village students” vs “A donation to village students”. They also donated 94% more books on average

• The positive effect weakens or disappears when

  • “Gift” and “Donate” are used interchangeably or together in communications

  • Recipients of the donation are physically or psychologically close to the donors (e.g. from the same local community, cancer survivors for a cancer charity) since they are already more likely to donate to them

  • Donors are people who see social distance as desirable (e.g. people who score high on questions like “It’s important to me that others respect my rank or position”)

People donated 29% more in one of the experiments when asked to “Gift” rather than “Donate”

🧠 Why it works

• “Donate” vs “Gift” signal different relationships between givers and receivers.

  • “Donate” suggests that we are distant from the receiver

  • “Gift” suggests we are close to the receiver

• Research has found that when we feel socially distant from someone we are less likely to help them.

• Framing donations as gifts makes us feel closer to the receiver, so we are more likely to help them - and we help them more.

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✋ Limitations

• Charities sometimes frame donating in other ways too (e.g. help, give). These were not tested, but the researchers expect them to have a similar effect to using “donate” because they don’t have the social symbolic meaning that gifting does.

• The effect seemed to be much stronger when the gift asked for was not money (i.e. used books). This could be because money is often an inappropriate “gift” between people and creates different social meanings (in the same way that money is less effective for referral rewards). More research is needed for a clear answer.

• It’s possible that the effect will weaken in the future as more charities adopt this technique and people get used to it.

🏢 Companies using this

• More and more charities include gift framing in their communications, although its usage and effect seem to be inconsistent and poorly understood.

• Unfortunately, 69% of the charities analyzed (below) use gift and donation framing at the same time, which makes the use of gift framing ineffective.

• An analysis of the words used by the top 100 US charities (based on the 2019 Forbes ranking) found:

  • Gift: used 314 times by 83% of charities

  • Donation: used 268 times by 83% of charities

  • Support: used 38 times by 30% of charities

  • Contribution: used 31 times by 24% of charities

  • Care: used 26 times by 20% of charities

  • Giving: used 25 times by 19% of charities

⚡ Steps to implement

• Review your copy across all your channels (e.g. website, email, ads).

• Find all mentions of “Donate” or other terms (e.g. “Support”) and change them to “Gift”. Do this everywhere, from in-depth descriptions of what you do to CTA buttons.

🔍 Study type

Lab and online experiments and field experiment (an internal email to 202 employees of a medium size Chinese company encouraging them to gift or donate books)

📖 Research

Gift or Donation? Increase the Effectiveness of Charitable Solicitation through Framing Charitable Giving as Gift. Journal of Marketing (September 2022).

🏫 Researchers

• Phyllis Xue Wang. Renmin University of China

• Yijie Wang. Hong Kong Polytechnic University

• Yuwei Jiang. Hong Kong Polytechnic University

Remember: This is a new scientific discovery. In the future it will probably be better understood and could even be proven wrong (that’s how science works). It may also not be generalizable to your situation. If it’s a risky change, always test it on a small scale before rolling it out widely.

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