Scientists Explain why People Make Large Donations Anonymously

Researchers at the University of Bristol’s Center for Market and Public Organization who studied why people choose to make large donations to charity anonymously have found that it may act as a signal to other donors of the charity’s quality and worthiness.

The new study indicates that the reason why a person may choose to show the amount they have donated but conceal their identity is because it may act as a signal informing others looking to donate of the charity’s quality and worthiness

The new study indicates that the reason why a person may choose to show the amount they have donated but conceal their identity is because it may act as a signal informing others looking to donate of the charity’s quality and worthiness

The findings, presented on April 5, 2013 at the Annual Conference of the Royal Economic Society and published in a paper in the CMPO Working Paper Series, also show that anonymous gifts rather than public ones induce larger donations from subsequent donors.

The Bristol scientists studied the anonymous gifts from 70,000 donations made through a website to fundraisers running in the 2010 London Marathon, the biggest single fundraising event in the world.

They found that anonymous donations made on behalf of runners in the London Marathon account for the majority of larger gifts than public ones. Furthermore, anonymous gifts rather than public ones induce larger donations from subsequent donors who give around four per cent more.

The findings also reveal that early donations are more likely to be anonymous than later ones, particularly for the first to a fundraising page.

“Current literature on the reasons behind anonymous donations is limited. Our findings indicate that actually a large anonymous gift is viewed by other donors to the charity’s worthiness,” explained study co-author Dr Michael Sanders.

“A recent example of this type of phenomenon is the anonymous donation of $200 million to Baylor University in Texas – the largest donation in the University’s history – which acted as a signal of prestige for the organization to other potential donors.”

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Bibliographic information: Mike W. Peacey and Michael Sanders. 2013. Masked Heroes: endogenous anonymity in charitable giving. CMPO Working Paper Series, paper no. 13/303