Will major donors pay overhead to leverage engagement and giving from new donors?

A study published last fall in Science (view abstract) reports that more first-time donors gave and gave higher amounts when an appeal stated that overhead costs had been met by a prior donor. The total project costs were $20,000, and all comparison groups in the study had $10,000 commitments in hand. The letters that stated the $10,000 commitment was for overhead raised the most. The research is part of the Science of Philanthropy Initiative, based at the University of Chicago.

The study’s authors, Uri Gneezy, Elizabeth Keenan, and Ayelet Gneezy, all of the University of California, San Diego, propose that nonprofits seek major donors willing to cover overhead costs. They see this as a way to help charities raise more, build the list, and create a stronger fundraising base.

The full article was originally published in the 31 October 2014 print issue of Science Vol. 346 no. 6209 pp. 632-635.

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