Tools for Changing the World

Social psychology for social good

Sometimes fundraising products don’t

March 28th, 2011

Vivian INSPI(RED) Photoshoot - 10/20/06They’re everywhere. Buy three cans of cat food and we’ll give a dollar to a home for unwed cats. Buy a bottle of carrot juice and we’ll donate a carrot to Vegetarians In Crisis Through Inadvertent Meat Snacking.

Fundraising products – called “cause marketing” in the biz – have become more and more common since their introduction in 1983. There’s no doubt that they increase sales for the company offering them, but it’s always been assumed that they also financially benefit the related charity.

Unfortunately, new research has shown that that isn’t always true.

Recent experiments by Aradhna Krishna found that purchasing a charity-related product decreased an individual’s direct donations, even when the purchase was “costless” (the consumer had intended to buy that product anyway).

Krishna set up a booth on a university campus advertising a charity event for the American Cancer Society. On two days, passersby were asked to donate to the cause, while on two other days, the booth sold energy drinks for $2.50 with a 50-cent donation to the charity and also asked for direct donations.

Not only were fewer direct donations made on the days the booth was also selling a product, but the donations were smaller. More importantly, the total gain for the charity from product sales and donations combined on the product days ($18.06) was less than half as much as was donated on the donation-only days ($52.27).

This might have been because donors assumed that the charity would do so well with the fundraising products that regular donations weren’t as necessary. So, Krishna asked volunteers to spend an imaginary $100 on real products and/or donations to a specific charity (AIDS in Africa), with one randomly chosen volunteer actually receiving the products he or she picked. Half the volunteers chose from a list of products that included charity donations with certain purchases, while the other half saw the same products but without the associated donations.

As in the first study, the volunteers who had the option of buying fundraising products donated less. And as in the first study, the charity took a financial hit when fundraising products were available. The combination of gains from product sales and direct donations came to an average of $24.98, while direct donations from those not seeing the fundraising products averaged $43.30.

As Krishna wrote,

“This suggests that even if [fundraising product] purchases are costless, consumers think of their purchase as a charitable act and decrease subsequent charitable acts… People may mentally assign their [product] expenditure as their charitable giving.”

Fundraising offer for the Red CrossThis doesn’t mean that every fundraising product is losing money for its charity, but it does mean that we can’t assume that fundraising products are always beneficial.

This is need-to-know information for those of you directly involved in fundraising, but it’s also important to the rest of us. When we buy products whose manufacturers are donating to charity with every purchase, we need to remind ourselves not to let our purchases stand in for our generosity elsewhere. Because those unwed cats need your help!

And those children with AIDS in Africa really do.

Leave a Comment