Do Tote Bags or Charitable Deductions Help Giving?

Here’s yesterday’s installment of The Daily Stat from the Harvard Business Review:

DECEMBER 27, 2012
Why You Don’t Like Donating to Charities That Offer Thank-You Gifts
Research participants were willing to donate 38%
less, on average, to public broadcasting if the U.S. nonprofit offered a
thank-you gift, in this case a pen, say George E. Newman and Y. Jeremy
Shen of Yale University. A promised gift of a tote bag brought intended
donations down 17%.
A thank-you gift creates ambiguity in the donor’s mind about whether
the donation is supporting the charity or is a quid-pro-quo, the
researchers say.
Source: The counterintuitive effects of thank-you gifts on charitable giving

Frankly, thank you gifts have never enticed me to make a contribution to a not-for-profit organization.

In fact, they act as a reverse incentive on me, making it less likely that I will give.

Rightly or wrongly, I have a visceral reaction that goes something like this: If they can afford to give me something for my contribution, maybe they don’t need my money. Maybe, I think, they could save a few bucks and lower their cost of operation by not buying thank you gifts.

Now, I’m sure that at least some of the thank you gifts offered by not-for-profits are donated by corporate sponsors who, in turn, are able to write the donations off on their taxes.

But that raises another issue. Even though taxpayers, individual or corporate, would be crazy not to take advantage of the charitable deduction of our tax laws, I’m not a fan.

There are several reasons for this.

[To read the entire post, please go here.]

Author: MARK DANIELS