Some fascinating new research by Michael Norton and colleagues demonstrating that giving customers a vote in where charitable dollars are directed increased the amount they spent on a given visit to a retailer and also increased their likelihood of signing up for a yearly membership in the buyers club.
The past decade has seen an enormous increase in the number of companies engaged in charitable-giving initiatives, both with their customers and their employees. Many major brands now offer some form of charitable tie-in (“10% of profits go to charity”; “buy one and one goes to charity”), and many companies offer matching programs for employee donations. On their face, both types of initiatives feel good: Companies are showing they care. But the underlying psychology is more complex. Offering to donate to charity if and only if customers buy or employees donate is a little bit like a friend telling you that she’s happy to help you move—she’s got the time available—but only if you help her move first. She’s still going to help you, but you certainly see the offer of charity differently when it’s contingent on you being the first mover. One seeming solution to this signaling problem is simply to donate money to charity with no strings attached, and then inform stakeholders after the fact. Indeed, this is common as well: Customers are informed via advertising, and employees via emails from their human-resources department.
