The science behind online charitable giving

Counterintuitive limits increase donations, says give2gether CEO Arnon Shafir.

By
January 30, 2015 02:02
3 minute read.
ARNON SHAFIR

ARNON SHAFIR. (photo credit: NOAM GALAI)

 
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What do algorithms, game theory, and scientific research have to do with charitable giving? “Everything,” Arnon Shafir, co-founder and CEO of give2gether, recently told The Jerusalem Post.

Give2gether, the brainchild of Shafir, a graduate of the elite IDF 8200 unit, and two economics professors – Shachar Kariv and Hoan Soo Lee – is a crowdfunding platform for charities and nonprofits aiming to revolutionize online philanthropy.

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The end product of 10 years of research in game theory and behavioral economics, give2gether aims to better understand the science behind what makes people give, and in turn how to utilize this knowledge to help nonprofit organizations achieve their fund-raising goals.

“Bill Clinton once asked ‘how can we democratize philanthropy?’ Well, that is what we are trying to do, change the world one dollar at a time by making fund-raising more effective,” said Shafir.

The company’s model is very similar to the well-known crowdfunding platform Kickstarter, and is backed up by 10,000 hours of research and experiments on real-life people in philanthropic situations.

“Today crowdfunding is very well known, but we developed this field before it became popular,” he said.

Rather than engage in traditional fund-raising, give2gether has adapted game theory to develop unorthodox approaches to fund-raising, which can increase an organization’s donations by tens of percents if not more, Shafir said.

Among the counterintuitive approaches, give2gether limits the amount that people can donate to a charitable campaign, as well as the amount a charity can ask for and the time required to raise the funds.

“We found that minimum and maximum donations caps for a specific campaign at a specific time contribute to higher donor contribution, and can increase the likelihood that a person will donate by three or four times,” he said.


“The principle is simple,” Shafir explained. “If for example a children’s hospital needs $50,000 dollars for life-saving crash carts, it will set minimum and maximum donation limits as well as a time limit for its campaign, and it will be more likely to get a lot of people to donate, because you will be more likely to donate if you know you only have 30 days to help them save lives and that your donation will make a difference – it brings donors to a different emotional situation.”

Using an “all or nothing” approach, in which the organization either raises all of the money to meet its goal or returns the money to the donors, further assists people in making the choice to donate, he explained.

“This also brings a transparency to charity, where the donor knows exactly what the money will be used for and there is no question of excess funds going toward an unknown cause,” he said.

Charities can set up a fund-raising campaign page within 15 seconds on the give2gether site, “almost like magic,” Shafir quipped.

Then give2gether “enters the picture,” and using its secret algorithms advises the charity on the optimal minimum and maximum donations, the sum of the campaign, and how long the campaign should last. As such, the average give2gether campaign stands at some $38,000 and runs between four and six weeks.

“Studies have shown you only have 15 seconds to convince a person to donate,” said Shafir. “What most people don’t realize is that what they see in these few seconds is really a decade’s worth of research.”

This research, it seems, has paid off, as more and more organizations and nonprofits – from small, local philanthropies to international NGOs – are adopting the give2gether model.

“I am proud to say this is one of the leading products in the world for raising funds for charities with an emphasis on intelligent crowdfunding,” Shafir said.

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