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Can’t Accept A Donation? Provide An Alternative

Rejection can be hard and not just for door-to-door encyclopedia salesmen or lovelorn teens. Fundraisers never want to say no to a donor, even if it is a donor offering up unwanted goods. That person could come back in the future with a monetary gift or some other contribution.

Fundraisers afraid of rejecting donations of unwanted goods for fear that donors won’t give at all can provide the opportunity to make a cash donation to help mitigate emotional responses, according to a recent study. It doesn’t have to be a big donation. And, it could very well be a non-monetary alternative, such as joining the organization’s mailing list, supporting it on social media or scheduling a future appointment.

Kaitlin Daniels, assistant professor at the Washington University in St. Louis John M. Olin Business School and León Valdẻs, associate professor at the University of Pittsburgh’s Katz Graduate School of Business, studied how rejected donations impact individuals’ decisions to donate again. The result is the 31-page report, “Trying and Failing: Biases in Donor Aversion to Rejection,” published in SSRN.

“We measure subjects’ donation decisions and beliefs about the probability that their donations are accepted. We compare these measures against a for-profit experimental condition wherein the subject, not an NPO, receives the payment generated by the real-effort task. Our results identify a mechanism by which rejections affect donations: via a reduction in donors’ beliefs about future success.”

There are several reasons why a nonprofit might reject a donation of goods, according to the authors. One, it might be of low value, such as junk food donations to a food pantry. Second, a nonprofit might already have a big inventory of the items, like a library with more Harry Potter titles than it knows what to do with until eternity. Third, maybe the donation is a liability — think blood donors who might have encountered blood-borne diseases. And finally, a nonprofit quite simply could just be out of space. “This is a particularly common problem in donations’ supply chains, where donors often have poor visibility into the needs of aid recipients,” the authors wrote.

Rejecting an unwanted donation gives nonprofit managers more control over inventory as well as relieves it of costs of sorting, storing or disposing of unwanted donations. But organizations might hesitate rejecting a donation for fear of alienating donors who might otherwise contribute something they want in the future.

The authors cite research that blood donors whose donations are not accepted are 28% less likely to donate again within about 4 years than non-deferred donors. A survey of food banks found that 15% of them banned certain low-nutrition items, while nearly half had no nutritional guidelines or policies.

Turning off repeat donors may restrict the availability of donations in the future, forcing the charity to replace their donations with new donors – always more costly and new donors are less likely to give again than repeat donors. Even 40% of those that had guidelines reported uncertainty about how to handle unwanted donations, according to the study.

“The ability of an NPO to reject unwanted donations rests on the assumption that the NPO knows what goods are and are not needed. However, there is often a lack of visibility about the true needs of recipients,” according to the authors. “Improving information sharing is therefore a critical first step for NPOs to achieve the operational gains from rejecting unwanted donations.”

Such information should be communicated to donors and those education efforts offer other opportunities to “desensitize donors’ beliefs to rejection,” by communicating precise information about the frequency with which donations are actually rejected.

As we celebrate our 36th year, NPT remains dedicated to supplying breaking news, in-depth reporting, and special issue coverage to help nonprofit executives run their organizations more effectively.


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