By Jyoti Madhusoodanan
Holiday wish lists and thank-you notes might be the very first letters we learn to write. The art of asking and expressing gratitude skillfully is also critical to organizational success—particularly for charities reliant on donors for financial support.
K. Sudhir, professor of marketing at Yale SOM, recently learned just how important. When Matthew Cherian, the CEO of Indian nonprofit HelpAge India, approached him through a friend for suggestions on ways to boost donations, Sudhir recalls coming up with several ideas rooted in economic theory, such as using gifts or matching grants. Cherian pointed out that such ideas were expensive or unfeasible for the nonprofit, however. “And that really got me thinking about how to improve giving through better asks that don’t cost more.” Sudhir says.
HelpAge India cares for disadvantaged elders. It doesn’t have the budget for much advertising or marketing, but it typically thanks donors in an annual letter. Sudhir wondered if this existing mailing could do more. What if, in addition to thanking donors for past contributions, the letter also reminded them to give again. Would donors be moved to be more generous—or would they be put off by the request?
Such an ask can be successful among some donors and backfire among others, according to a new study by Sudhir, Yale SOM doctoral student Hortense Fong, and Subroto Roy of the University of New Haven that used the HelpAge India mailing as a test case. While some people were more willing to give, those who had donated recently were actually deterred from giving.
Initially, the researchers set out to test the effectiveness of including different requests in the thank-you note. They mailed three different versions to about 200,000 past donors who had given at any point in the previous seven years. One group received a letter with a mail-in donation form attached, another received a letter that asked recipients to “like” the charity on Facebook, and a third version of the letter explicitly asked for monetary donations. “We didn’t know which of these three scenarios would work,” Sudhir says. “Would people perceive these asks as ungrateful or greedy, or would they see the thank-you letters simply as expressions of gratitude?”
Not including the mail-in form significantly reduced donations. And including any kind of request—even simply asking recipients to follow the organization on Facebook—decreased donations, perhaps because it made the thank-you notes seem less sincere. “That was a little bit of a surprise to us,” Sudhir says.
At first, the results seemed to suggest a clear path for charitable organizations: implicitly solicit donations with a mail-in form but don’t make an explicit request in a thank-you note. Then the researchers began to wonder whether the results might change if they grouped donors differently.
Initially, the researchers and organization hadn’t factored in how recently donors had contributed. “The organization was basically thinking about whether this ask might help or hurt,” Sudhir explains. “Only later did we realize that the effects of such a mailing might depend on the donors’ past behavior.”
And indeed, the researchers found a significant difference when they split the data based on people who had given within the past year and those who had given more than a year ago. Recent donors tended to give less when explicitly asked to do so in a thank-you note. But the latter group gave approximately 10% more when the letter included a call to donate, perhaps because the request served as a reminder. Simply varying the message sent to donors based on this classification—those who had given recently versus long ago—boosted the amount received.
“People who donated in November and received a letter asking for more in January might feel annoyed,” Sudhir explains. “But if someone gave a year or more ago and were thanked for it, they might feel spurred to give again.”
Sudhir and his co-authors found that simply customizing this annual thank-you note based on which donors had donated recently would result in an approximately 10% increase in donations. It’s a strategy that could work for other nonprofits and charities that require ongoing engagement, Sudhir notes.
“The results are likely relevant to any nonprofits that rely on monetary donations,” he says, “Most of what we did in this context applies to any other country, and across different kinds of charities.”
To Sudhir, applying time and research to devise such practical solutions is “the most fulfilling kind of consulting,” he says. “I could’ve given them a one-time check, but this is a gift that keeps on giving—by increasing their donations 10% every year they send those thank you notes.”