It actually works – how behavioural insights can increase workplace giving

By: By Rebecca Moriarty   |   Project Manager at Philanthropy Australia   |   https://www.philanthropy.org.au/about-us/staff/53-rebecca-moriarty/

How much do people have to change to double workplace giving? Could it be as easy as an email from a boss, couched in encouraging language? And just how important is the discipline of behavioural economics in helping us understand workplace giving and forecast ways we can boost it? Simple behavioural changes can work to increase workplace giving, as suggested by new findings from a recent report undertaken for a major Federal Government department.

A new report from the Behavioural Economics Team of the Australian Government (BETA), 'Increasing workplace giving: What works at work?’ was released in March detailing trials BETA conducted to test interventions that increase workplace giving. In 2018-19, about $43 million of donations were given through the workplace. According to the report, if 10% of Australia's workforce donated $5 a week through workplace giving, an additional $338 million would be invested into generating positive, long-term changes for our society in just one year.

One of the BETA observations was that a single email sent with a little more encouraging language can boost participation in workplace giving by 38%. If that’s easy, what could happen if workplaces went a little further and adopted other initiatives? Not just targeting the number of people that give, but how much they give. This doesn't have to be hard, as former Good2Give CEO Lisa Grinham explored last year here. As Lisa points out, employees are enthusiastic to give and the workplace can meet that demand to the benefit of our charities and the causes they passionately serve. A culture of giving enriched by behaving just a little bit differently.
 

Behavioural economics is an extensive field to learn lessons from

BETA’s approach to the workplace giving scenario is built on the behavioural economics approach that has grown widely since the 1978 Nobel Prize was awarded to Herbert Simon who tactfully recognised that people can't think of everything all the time, to put it simply (Simon's full works on 'Bounded rationality' offers a lot more insight). The framework BETA used in their trials drew from the growing body of knowledge that helps us understand donor behaviour here and overseas

Simple assumptions and social norms about why and how people donate are tested in experimental studies both in the home and the workplace. Some findings support what we already think is true, for example, donors are more likely to give if they see a leader doing the same or encouraging them to do so. The findings also provide interesting insights into how much more is given.

In the same study, donors gave 44% more on average when they were told their gift would be matched by the Bill and Melinda Gates Foundation (Ideas42, 2019). In another trial, the combination of being told a leader gave and specifically referencing their gift as a 'challenge gift' (to ignite the competitive spirit) increased participation rates by 23% and total contributions by 18%  than without the reference (Ideas42, 2019). The research emphasises that we are social creatures so one person's giving is heavily influenced by their perception of how other people give (The Marketing Society). Many other studies have revealed insightful findings about giving across other behavioural themes like image and identity, emotional attachment, empowering personal choice, time preference, avoidance tendencies, how money is valued differently and how to frame the ask.
 

The behaviourally-informed framework used in the report

BETA’s report applied insights from behavioural studies around the motivations and barriers of giving including the following motivations:

  • Pure altruism: giving with compassion,
  • Warm glow (or 'impure' altruism): giving because it makes us feel good.
  • Social norms: take our cues from the behaviour of others.
  • Reciprocity: desire to give back based on the treatment we recieve.

  Barriers such as:

  • Moral wiggle room: finding reasons to justify choices to behave in self-interest.
  • Choice and cognitive overload: too much information such that making a choice is difficult. May find ourselves sticking with the status quo or 'do nothing' state.
  • Friction costs: the process to do something is difficult or time consuming and do reduces the rate of giving.

Considering these motivations and barriers the authors developed the 'EAST' framework to underpin the design the emails sent out to encourage workplace giving - Make is Easy, Attractive, Social and Timely.
 

Leaders increase participation in workplace giving

The number of employees donating through workplace giving has grown from around 101,373 employees in 2010 to 211,316 in 2020 - about 5% of the total workforce - giving around $215 per year on average (JBWere, 2022). One component of BETA's study was trialling different kinds of email-asks sent to public servants (APS). The design of the 'behaviourally-informed' email considered the motivations and barriers, using language 'emphasising the benefits, impact, and ease of workplace giving'. In the APS study of BETA’s trials, they found sending a behaviourally-informed email compared to a basic email increased the enrolment rate by 38% to 3.3% overall.

Another major finding was that the highest participation rate in workplace giving occurred in the behaviourally-informed email-ask from a senior manager that involved a simple sign-up process.

As shown in the table below, the participation rate increased by 71% compared to an email sent by a peer with the standard sign-up process. Extending this to Australia's entire workforce, this increase is equivalent to 362,000 people. At $246 per gift (average gift in 2020 from JBWere, 2022), this could bring in up to $89 million per year in additional investment in positive change in our society through the work of charities. 

Four treatment groups refer to the employees that received an email from a peer with the current sign-up process, an email from a senior manager with the current sign-up process, an email from a peer with the simplified sign-up process and an email from a senior manager with the simplified sign-up process. These differences between the enrolment rate can be attributed to the 4 different treatments, or interventions. For example, the enrolment rate was 1.4% in the group that received an email from a peer with the current sign-up process.

 The idea that involvement of senior management encourages more employees to give aligns with others research in the Australian context (JBWere, 2018).
 

But to grow average donations something more is needed

However, while participation rates increased, the BETA authors found 'there was no meaningful difference in average donations between the four treatment groups' (BETA, 2022, pg 19). Flat average donations are evident over the last decade, as shown below. Average annual donations were $225 in 2010 and $246 in 2020. Unlike the consistent rise in the cost of living index for employees (8-9% increase in 2020 compared to 2010), the average donations given to charities through the workplace have not increased by much.

Other studies suggest increasing the value of a donation can be achieved by simply mentioning how much others gave (Idea42, 2019). Providing a social benchmark or a reference point is effective. What can also encourage a larger gift is mentioning how much donors have given in the past. A small increase in the size of the average donation across a growing number of people giving can rapidly transform the capability of charities and non-for-profits to deliver impact in our communities.

Since the merger of Good2Give, Workplace Giving Australia and ShareGift Australia in December 2021, the company is well positioned to build the appeal and momentum of workplace giving to achieve their goal of 1 million donors engaged in workplace giving programs. You can read about the challenges and opportunities the CEO, David Mann, here.

Applying behaviourally-informed elements in the design of the donation ask can have powerful impacts in the workplace and potentially lifting the rate of giving. On the evidence of the behavioural economics approach, it could take as little as an email of encouragement to increase the average donation. There is a huge opportunity to enrich the culture of giving in the workplace from a contribution $43 million a year to above $100 million by doing things just a bit differently.

References
- BETA, March 2022, 'Increasing workplace giving: What works at work?', Department of Prime Minister and Cabinet
- Grinham, L, June 2020, ‘Let’s simplify workplace giving to boost donations,’ Philanthropy Australia Weekly Newsletter, https://www.philanthropy.org.au/blog/view/lets-simplify-workplace-giving-to-boost-donations/
- Ideas42, May 2019, 'Behaviour and Charitable Giving 2019 Update', www.ideas42.org
- Mann, D, March 2022, ’10 questions with David Mann’, Philanthropy Australia Weekly Newsletter, https://www.philanthropy.org.au/stories-10-questions-for-david-mann
- McLeod, J, March 2022, 'The Corporate Support Report', JBWere
- McLeod, J, April 2018, 'The Support Report – The changing shape of giving and the significant implications for recipients'', JBWere
- ​The Marketing Society, 'How BE is nudging us to be a more giving society', https://marketingsociety.com/the-gym/how-be-nudging-us-be-more-giving-society

Apr. 08, 2022

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