A recent study found that fundraising which highlights a ‘low category’ of giving, actually incentivises more donations. Dr Edward Cartwright explains why he and his fellow researchers were surprised.

There is considerable variation in the way fundraisers publicise donations. One possibility is to publicise a list of names with the amount donated; this is what you’re likely to find with personal fundraising, such as a sponsor form or a JustGiving web page. Another possibility is to use donation categories and list the names of people in each category.

Here are three examples of this approach: The University of Warwick sends its alumni a brochure containing a list of donors giving more than £1,000. The University of Glasgow’s donor wall has six category thresholds ranging from £250 to £10,000. Donors to the Royal Opera House are listed on the Supporters’ Board as Platinum, Gold or Silver Patrons with the fee ranging from £22,200 to £5,200.

In recent research with Amrish Patel (of the University of Gothenburg) we question whether donation categories are a good idea. Specifically, we were interested in two questions:

1. Is it best to report the exact amount each donor gives or to publicise donations using categories?
2. If donations are publicised using categories then what are the optimal category thresholds to use?

The results were not what we expected!

We took as our starting point the empirical evidence on categories and recommended donations. This evidence shows that donations become highly clustered around the amount asked for. For example, two studies by William Harbaugh compared giving by alumni to a law school following changes in the way donations were reported. In the first instance few people donated $250. Once the school began publicising donations of $250 or more, the number of donors giving $250 dramatically increased. When the law school changed the threshold from $250 to $500 the number giving $250 fell back to previous levels.

With this clustering effect in mind, consider the introduction of category reporting. To fix ideas, suppose that the names of all those donating £1,000 or more will be published. This can have four basic consequences: