Saturday, July 23, 2011

Recognition and reward: When the two don’t mix

What motivates donors?  No doubt, this can vary from donor to donor.  But, professors at Duke, Columbia, and Tel Aviv Universities ran experiments to explore two particular kinds of donor motivations, extrinsic motivation and image motivation.  Extrinsic motivation can arise when donors receive a reward or benefit from donating.  These rewards can include tax breaks, tickets, auction items, or gifts.  Image motivation is based on how others will perceive the donor’s actions.  For example, some donations might signal the donor’s philanthropic spirit or wealth.

To test these two motives, professors Dan Ariely, Anat Bracha, and Stephen Meier conducted an experiment with college students at Princeton.  The students participated in “Click for Charity” where they could earn money for a charity by repeatedly pressing particular keys on a keyboard.  The more effort students spent on the task, the more money they raised for the charity.  Some students were assigned to the “public” group.  In the “public” group, students had to share their results with each other at the end of the experiment.  Other students were in the “private” group, where results would not be shared with others.  Not surprisingly, those in the public group gave more effort and, ultimately, raised more money for charity.  This, the researchers’ believed, resulted from image motivation.  Only those in the “public” group had an audience for their actions, and could thus be motivated by the perceptions of others.

But, the experiment did not stop there.  Some students in both groups were also given money incentives.  These students raised money for charity, but they were also paid an amount identical to whatever they had raised for charity.  The compensated students in the “private” group gave more effort than the non-compensated students in the “private” group.  This makes perfect sense.  Although the “private” group had no image motivation, the compensated members had an extrinsic motivation.

  The results, however, were very different for the “public” group.  The compensated students in the “public” group actually gave less effort than did the non-compensated students in the “public” group.  In fact, among the compensated students, the effort levels were the same regardless of whether the students were in the “public” or “private” group.

Why the difference?  The researchers believe that introducing compensation (extrinsic motivation) reduced the image motivation for the “public” group members.  The non-compensated “public” group students knew that others would see their selfless efforts.  But, the compensated students’ efforts could be interpreted as either philanthropic or selfish.  (Compensated “public” group members had to report to others both how much they raised and how much money they received.)    To verify these results, the researchers ran a similar experiment, this time in the MIT gym, where students could “bike for charity.”  As before, adding compensation increased the efforts for the “private” group, but slightly reduced efforts in the “public” group.

How might fundraisers use these results?  While extrinsic benefits like rewards, tickets, or gifts can be useful, it may make more sense to focus these benefits on private activities.  Giving these kinds of extrinsic benefits for visible pro-social activities (such as volunteering) may be counter-productive and actually reduce participation.

Citation: American Economic Review, volume 99, pp. 544-555.

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