Donors seen to seek social status

April 3, 2009

Holger Sieg

When it comes to giving, benefits that are exclusive or high-profile are most likely to induce larger donations, a new study says.

Benefits such as invitations to exclusive parties or other events are the strongest incentives for donors to give to charity, says the report from the Tepper School of Business at Carnegie Mellon University.

Such benefits that appeal to a donor's sense of personal status far outweigh the "warm glow" contributors feel when making a donation, says the study, "The Joys of Giving and Receiving."

Of the 10 Pittsburgh-area charities studied, those that currently rely on private benefits to lure donors would fare worse without such inducements, the study says.

And among individuals studied who support several charities simultaneously, donations would drop significantly if benefits were taken away.

"Clearly, certain charities could yield big returns from ramping up the exclusivity of the special events they offer to high-potential donors," Holger Sieg, professor of economics at Tepper, says in a statement.

The study was funded by the National Science Foundation.

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