Donor Giving Increases With Incentives That Appeal to Sense of Social Status

Generally, the study's simulations found that charities already relying heavily on private benefits to attract donors would see much lower giving levels if these benefits were eliminated. Further, organizations not currently employing such benefits for fundraising might actually realize a slight increase in the number of donors and overall contribution levels if "competing" charities that use private benefits were to eliminate them. In addition, the nearly 8 percent of individuals in the data sample who supported multiple charities would decline significantly if high-value private benefits were eliminated.

Sieg believes that other regions would yield similar findings by identifying the same fundraising potential from exclusive benefits. "Clearly, certain charities could yield big returns from ramping up the exclusivity of the special benefits they offer to high-potential donors," Sieg said. "This is valuable information to have, especially in the midst of the fundraising challenges faced by nonprofit organizations in a recession."

The study, titled "The Joys of Giving and Receiving," was funded by the National Science Foundation, and is available for download at http://www.andrew.cmu.edu/user/holgers/papers/sz_11_08.pdf.

About the Tepper School of Business: Founded in 1949, the Tepper School of Business at Carnegie Mellon (www.tepper.cmu.edu) is a pioneer in the field of management science and analytical decision-making. The school's notable contributions to the intellectual community include six Nobel laureates, a Nobel Prize record that is unsurpassed by any business school worldwide. It is also among the schools with the highest rate of academic citations in the fields of finance, operations research, organizational behavior and production/operations. The academic offerings of the Tepper School include undergraduate studies in business and economics, graduate studies in business administration and financial engineering, and doctoral studies.