Listen to donors — not experts — when devising fundraising strategy

Attention nonprofit professionals: When you consider fundraising ideas, new UB research shows you shouldn’t rely on, well, academic research, or industry experts either.

The study found in-context field testing was a better predictor of how an organization’s donors may react to specific appeals — and which appeals will be most successful.

“When attempting to predict which solicitation will resonate with your donors, it turns out there’s no substitute for the real thing,” says Indranil Goswami, lead author and assistant professor of marketing in the School of Management. “Donors have many motivations for giving. So, while academic models and other fundraisers’ successful practices can provide ideas for strategies or messaging, only a field test can gauge how your donors will respond to those tactics.”

Goswami co-authored the study, which recently appeared online ahead of print publication in Marketing Science, with Oleg Urminsky, professor of marketing at the University of Chicago Booth School of Business. Together, they partnered with a well-established arts nonprofit to run two field experiments during the nonprofit’s regular appeals, mailing solicitations to more than 4,500 prior donors.

Some donors received a standard matching appeal, in which their contribution is matched by another donor, while others received a “giving credit” appeal, in which the matched amount is added to the donor’s contribution, rather than made as a separate contribution by the match-funder. From there, the researchers compared their results to the predictions of both theoretical models and more than 100 industry experts.

“Both experts and academic models thought the ‘giving credit’ message would either have a positive effect or at worst no effect, compared to the standard match,” Goswami says. “Both predicted donors would experience more positive feelings and perceive it as a better opportunity to help others, increasing both participation and donation size. But that’s not what happened.”

In both appeals, the “giving credit” framing resulted in fewer contributions and less money raised per person than the standard match.

“Clearly, using this framing — a reasonable choice, given the sources of guidance available to the fundraiser — could have been a costly mistake,” Goswami says.

“However, we are not suggesting that organizations simply rely on our finding to make decisions about their solicitations,” he continues. “Other donors in another context may react differently to a similar appeal, showing the complex nature of donor psychology and their giving decisions. Instead, we recommend organizations test new fundraising ideas with a small group of their own donors before full implementation, as the information you gather will far outweigh any minimal costs from the test appeal.”