I often hear people say that donations in the form of a monthly direct debit is more useful to charities than one-off donations, since it makes their cash inflow more predictable and easier to budget.
I am not sure how much it is ‘really more useful’ and how much it’s entangled with the charities’ belief that people who set up a regular donation will give more in total … because they ‘learn to give’, because each individual donation seems less costly, because they forget to unsubscribe (intertia/inattention), because it gives them a regular good feeling, because it changes the anchor so that ‘cancelling a regular donation’ feels like betraying the charity. The conventional wisdom is “once people start regular donations they rarely cancel or change them.”
But the causality is hard to determine here, as you can imagine (I could dig into the literature).
Anyways, it might be that charities say ‘please set up a regular donation because it helps our planning’ because they feel less comfortable saying ’please set up a regular donation because we think it will convince you to give more in total.
For smaller donations regularity should probably be less important, in a planning sense. Still, I suspect that someone who sets up a regular donation or makes repeated donation is giving a more reliable signal that they will donate more in the future (as Peter suggests).
On the other hand, if you asked a charity ‘should I give $10k now or $500 a month for the next 2 years’, they may very likely choose the former.
I am not sure how much it is ‘really more useful’ and how much it’s entangled with the charities’ belief that people who set up a regular donation will give more in total … because they ‘learn to give’, because each individual donation seems less costly, because they forget to unsubscribe (intertia/inattention), because it gives them a regular good feeling, because it changes the anchor so that ‘cancelling a regular donation’ feels like betraying the charity. The conventional wisdom is “once people start regular donations they rarely cancel or change them.”
But the causality is hard to determine here, as you can imagine (I could dig into the literature).
Anyways, it might be that charities say ‘please set up a regular donation because it helps our planning’ because they feel less comfortable saying ’please set up a regular donation because we think it will convince you to give more in total.
For smaller donations regularity should probably be less important, in a planning sense. Still, I suspect that someone who sets up a regular donation or makes repeated donation is giving a more reliable signal that they will donate more in the future (as Peter suggests).
On the other hand, if you asked a charity ‘should I give $10k now or $500 a month for the next 2 years’, they may very likely choose the former.