Actually, previous research has shown that people are more likely to make a donation the greater the impact they think it will have. For example, people are willing donate more money in charities the more efficient they think they are.
Thus, when people decide to give time or money to their chosen cause, their decision may ultimately depend on which of the two they believe will be more impactful or effective.
In a series of studies, Kellogg associate professor of marketing Rima Touré-Tillery and incoming assistant professor of marketing at Michigan Ross and Kellogg graduate Samantha Kassirer examine people’s willingness to donate either their time or their money.
They find that people are generally more willing to give of their time because doing so makes them feel like they’re making a more personal contribution (what the authors refer to as greater “self-gift overlap”). This, in turn, makes them feel that donating time is more meaningful and, subsequently, more effective than donating money.
“People see less of themselves in their money and more of themselves in their time,” says Kassirer. “That’s why people expect their time to be more efficient than their money.”
“The result,” adds Toure-Tillery, “is that people will choose to donate time over money, even if it’s objectively less efficient in the end.”
Time or money?
Even before she began looking at this study on charitable giving, Kassirer was no stranger to the subject.
“I’ve volunteered my whole life and I come from a family that praised volunteerism,” she says. “So I was interested in this puzzle of finding the most effective way to give.”
When Touré-Tillery and Kassirer began to explore the issue, they found that most people who donate seem to think it is more effective to give their time than their money, even though previous research has shown the opposite—that money is usually more effective. In fact, when the researchers did their own calculations comparing the value of giving time versus money, they found that, on average, donating an hour of one’s salary had a significantly greater impact than volunteering an hour. This disconnect between what people think is valuable and what is actually more valuable prompted researchers to conduct a series of studies to better understand why this happened.
In one study, 601 people filled out a demographic questionnaire and received a small amount of money. A subset of these participants took a short bonus survey and received additional payment.
All participants then read a memo about how graduate students were struggling to complete their thesis during the COVID-19 pandemic due to a lack of access to research volunteers.
Those who had received the bonus study before learning about the competing students had the option of donating their extra payment to the student research fund. The remaining participants had the option of either donating their time (completing the bonus study without pay) or donating money (completing the bonus study for additional payment, which they could donate to the student research fund).
Mood for offer
After analyzing the results, the researchers found that 60 percent of the participants were willing to donate their time and take the bonus survey for free.
In contrast, only 33 percent of people who took the bonus survey before hearing about the struggling students donated the extra money they received. This rose to 44 per cent among those who completed the bonus survey after learning about the students’ status – indicating that people were more likely to donate money if they won it as part of the offer.
“We found that if people earn money specifically to give, it makes them more willing to donate,” says Kassirer. “But overall, people were still much more likely to donate their time than money, regardless of whether the money was earned to give or pre-earned.”
When participants were asked to reflect on their decision to donate, those who volunteered their time were more likely to say that their donation felt a part of them and to rate their donation as more effective, compared to those who gave money. So even though experts have found that it is more effective to give money, people have tended to donate their time largely because they mistakenly assumed it would be more effective.
Highlighting the impact of a donation
In a separate study, 819 people read either the same note about struggling students from the first study or a slightly different note adding that financial contributions to the student research fund were “very effective and impactful.” Half were then asked to donate their time by participating in the survey for free, and half were asked to answer additional questions for money they could then donate to the fund.
The researchers found that highlighting the impact of the gift helped encourage people to donate money. About 55 percent of those who received the general memo donated their money, while 63 percent of those who received the “effective and efficient” memo donated. In contrast, the notes had little effect on people’s willingness to donate their time: 73 percent of participants who saw the general note were willing to donate their time, compared to 69 percent who saw the “effective and impactful” note.
“People already expect their time to be highly efficient, but they don’t expect their money to be that efficient,” says Kassirer. “So when you tell them how effective their monetary donation is, it can really influence their expectations and change their behavior.”
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In study after study, researchers have observed that people donate time and money based on how effective or efficient they think the contribution will be.
The findings highlight the important role that perception can play in the world of donations and charitable giving. The best case for the personal connection or impact of a financial gift could shift people’s default belief that a donation of money is as effective and impactful as time.
“What would be amazing throughout society is if people learned more about the potential impact of their money and were really thinking about giving time versus giving money,” says Kassirer. “If this can be communicated by leaders and by marketers in nonprofits, it could really enhance the perceived efficiency of money and combat this common misconception about the efficiency of time versus money.”
“People want to make a difference, but their perception of what makes a difference is often biased,” adds Toure-Tillery. “It’s important for nonprofits and social marketers to understand this and ensure their communications work in a way that minimizes donor perceptions and emphasizes real effects of donations”.
