How charitable giving can be contagious

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With the rise of social media, it’s inevitable that it would have an impact on charitable giving. Sarah Smith, professor of economics at the University of Bristol, looks at social contagion in giving and how charities can encourage giving through social networks.

#nomakeupselfie powerfully demonstrated the potential to harness social networks to spread giving to a good cause.

#nomakeupselfie

But is #nomakeupselfie the exception rather than the rule?

Fundraising through social networks, a piece of research recently published in the Journal of Public Economics, looked at what happened when donors were given the opportunity to ask others in their social network to join them in supporting the same charity. The donors could ask others by posting on their Facebook wall or sending a message to a single friend (the two options were offered randomly).

More donors chose to post to their wall than to send a private message – but very few actually did either (7% and 4% respectively). The response rate, which was measured by the number of those who received the suggestion and who made a donation, was also very low at 1.2%, all from the wall posts. Putting the two together suggests that it would take more than 1,500 donors (and their social networks) to yield a single extra donation.

Social context matters. It’s all about who you know.

There are ways though that charities can encourage significant levels of giving through social networks. Getting people to fundraise online and share their personal fundraising stories with their friends, is more effective than a simple “ask” to donate to a charity. Most of the people who are asked to sponsor someone are either their friend, a member of their family or a colleague. A survey of JustGiving donors showed that of those asked to sponsor:

  • 96% had been asked by a friend (of whom 67% always gave)
  • 89% had been asked by a colleague (48% always gave)
  • 84% had been asked by a family member (87% always gave)
  • 70% had been asked by a charity representative (9% always gave).

A typical person on JustGiving who links their fundraising page to their Facebook page has 251 Facebook friends and gets nine donations – an implicit “response rate” of 3.6%. For people with even smaller networks, the response rate is even higher. The hypothesis being that they have a closer connection to each person in their network, therefore they are more likely to respond, when asked.

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What makes personal fundraising a more powerful ask?

First, the fundraising activity itself (the fact that someone is not just asking for charity, but running a marathon) and second, the fact that the donations are observable (the fundraiser can see who has responded to their request).

Third, incentives matter. The researchers behind Fundraising through social networks also looked at what happened when they offered donors incentives (in the form of extra donations) to ask their friends. A $1 donation increased the percentage posting to their wall to 17% (from 7%) and sending a message to 9% (from 4%). A $5 donation increased the percentages further to 19% and 14%, but wasn’t cost effective.

It could be possible to use incentives to greater effect. At a schools charity challenge we held with sixth formers last year, the single best idea was to “pass the match” – to allow a donor to leverage incentives by passing on a financial match to a friend as a way of encouraging them to donate. It’s a clever idea to combine financial incentives with social pressure and one that would be well worth testing in the field.

Interested in more social media stats? We recommend the following reads:

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Sarah is a professor of economics at the University of Bristol. Her research interests are in applied micro, specifically consumer behaviour and public economics. Currently Sarah's main focus now is the economics of not-for-profit organisations and she has been working closely with JustGiving.