The Negative Effects of Small Gift References in Charitable Bequest Marketing

ABSTRACT This paper presents the first randomized controlled experiment to examine the effects of small gift and small estate percentage references in legacy gift marketing. The results offer practical and theoretical insights for fundraisers. Previous research in current donations finds that using examples of smaller gifts (“legitimizing paltry contributions”) tends to increase giving participation rates but reduce gift sizes. A popular approach to marketing charitable bequests takes a similar approach by using examples of leaving 1% of the estate. As expected, the use of a small estate percentage example, such as 1% or 2% of the estate, did significantly decrease the intended gift size. However, these examples also had weakly negative effects on the likelihood of making a bequest gift. The expected giving participation/amount tradeoff arose only in the strength of the negative impact caused by percentage examples. As the example percentages increased (1%, 2%, 5%, 10%, 20%, or “whether it is 1% or 50%,”), the statistical significance of the negative effects on gift likelihood tended to grow, while the statistical significance of the negative effects on intended gift size tended to fall. Alternatives such as referencing small dollar amount examples ($100 or $500) or “a very small gift in a will” had no significant effect on the likelihood of making a gift. However, the negative effect on intended gift size was significant for the $500 example. In addition to these results, the financial dominance of large estate gifts and the one‐time nature of such gifts contraindicate marketing strategies (and performance metrics) focused on increasing gift participation at the expense of intended gift size.