Your donation forms need a big update, and all it takes is the click of one small button.
University of Chicago researchers recently found that most charities don’t include a defaulted contribution in their online donation forms. While this has long been considered a best-practice on the Web, new findings are suggesting otherwise.
Which leaves us with a really big question: How much should we default, then? Do we offer a high $100 default? Or do we hope that popularity swings in our favor with a low, $5 donation? Or do we even need to use a default value at all?
Finally, there’s some solid research on the subject, by Indranil Goswami and Oleg Urminsky.
Published in the October 2016 Journal of Marketing Research, “When Should the Ask Be a Nudge? The Effect of Default Amounts on Charitable Donations” sheds some light on our decision-making processes when we’re asked to give a certain amount to charity.
Goswami and Urminsky define three particular phenomena of interest that play into how we choose to follow — or ignore — the default value, or suggested amount, within donation forms. They include what are known as:
- The “Lower-Bar” Effect
- The “Scale-Back” Effect
- The “Default-Distraction” Effect
What is the Lower-Bar Effect?
We notice that a higher default donation value placed on forms increases the average donation size, but reduces the likelihood of participation.
What is the Scale-Back Effect?
Conversely, with the Scale-Back Effect, the data show that a lower default rate inspires more donors to give, but may also generate less revenue per person.
What is the Default-Distraction Effect?
This is where things can get a little more complicated. The Default-Distraction Effect simply means that introducing any default, large or small, could distract from other positive or legitimizing messages that may entice a person to give.
When researchers primed participants with positive information about the charity, or suggested things like, “every penny helps,” they found three particular interesting conclusions:
- Positive information significantly increased contributions when there was no default present.
- Neutral information increased contributions from donors provided with a defaulted option.
- Positive information decreased contributions from donors provided with a defaulted option.
This is particularly true for larger, nationally recognized or well-known charities, where the public might not want or need a default value to guide their donation size.
How Do I Know What Option is Right for Me?
Whether or not you use a donation default value on your Web form is fairly dependent on several factors. Namely:
- Audience behavior
- Location, virtual or physical
- Charity popularity
We did, however, create a few guidelines for you to use. While further research is needed to confirm our inferences, we consider these safe hypothetical courses of action.
When to Go High
- If you’re making your request in-person, or at an event. Particularly if you’re event is high-profile, like a black tie gala.
- Target a donor base that has, on average, more disposable income to spare on charitable contributions. This audience is generally less impulsive and is likely to take more time to research your specific charity.
- Your menu has fewer options. Research participants were randomly given between two–nine contribution amount options. Those presented with fewer options and a high default created slightly more revenue than a low default with fewer options.
When to Go Low
- High-impulse, low-involvement fundraising channels, like peer-to-peer giving and social crowdfunding, are great examples of reaching potential donors who have invested little thought and likely won’t invest much money.
- High social-proof and volunteer activity. An additional study in 2008 from the University of Gothenburg in Sweden confirms that people are also more likely to donate when told by their peers and acquaintances that the requested donation amount was low. If you have a lot of active volunteers and donors who are telling all their friends, a low default amount might be your best bet.
- Asking recurring donors to give again. This audience is more likely to give when a default is present in general. However, if the default value is equal to or slightly higher than what they contributed last year, the results are marginally better than if presented with a high default. But, both options are better than using no default for this particular audience.
When to Say “No” to the Default on Donation Forms
- If your organization is large or well-known and charities who have a wider positive perception.
- As stated by the Default-Distraction Effect, the default can often undermine the popular, positive perceptions of a charity, and lessens the likelihood for one to make a contribution.
If You Liked That, You’ll Love This
After reviewing the new findings on nudges, we’re glad to announce that we’re planning to add default value functionality to our Web forms within the next week.
But this post is just a small sampling of the data and findings we’ve gathered for our latest webinar. We created “The 5 Do’s (& Don’t’s) of Year-End Giving” to help you figure out the small improvements you can make to your fundraising initiatives during the most charitable time of the year.
We put a lot of thought into our ideas, because we’ve put a lot of thought into you. So come and join us for an hour. We think you’ll enjoy it.