Incentive-based fundraising is less effective, shows NYU Stern study

19 Sep

Who is more sincere – a volunteer or a paid fundraiser?

Here’s what research shows.

A study conducted by NYU Stern Professor Alixandra Barasch along with Jonathan Berman of the London Business School and Wharton’s Deborah Small revealed that fundraisers paid to raise money for charity were less effective than volunteers.

This, in essence, was the study.  Paid and volunteer fundraisers were asked to videotape their pitches to donors. These videotaped pitches were then shown to target donors (who were not aware of whether the fundraiser was paid or a volunteer). Here’s the interesting bit. Donation levels in response to pitches by volunteers (of fundraisers who did not receive a personal incentive) were higher than those where fundraisers received a personal incentive for securing the donation. The donors felt that the pitches by the former were more ‘sincere’.

“We found that tainting intrinsically motivated persuaders with a personal incentive reduces their persuasiveness,” the authors write. “Observers detect reduced sincerity and contribute less as a result.”

What lessons does this hold for face to face fundraising or tele-calling? The practice of charging a flat fee to raise funds – compared to a percentage or success-based fee – might not just be more ethical, but now, as this study shows, more effective.




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